Is BlackBerry stock ready to rebound? Here are four reasons the mobile maker may be moving up.
After years of losing market share in the consumer and enterprise smartphone market, BlackBerry (BBRY) is shaping up to be a speculative rebound play. The firm has been relegated to the “others” category in the global smart phone market share category (see the table below). Apple (AAPL) and Google (GOOG) have long been the dominant players in sales and the court of public opinion, and Microsoft's (MSFT) recent gain bumped BlackBerry out of named competition. Why should investors speculate on BlackBerry?
BlackBerry market share
BlackBerry lost significant market share in 2013, thanks to Microsoft shipments rising four fold. The Android operating system represented 78.9% of the market. Apple lost market share, but still held 15.5% of the market:
There are four reasons BlackBerry shares may finally have bottomed.
First, BlackBerry stated publicly that it would focus its efforts on the enterprise market. In addition to improving stability and battery life, BlackBerry improved support for Android applications, it recently released an update to BlackBerry Enterprise Services (BES), and BBOS 10 was updated to 10.2.1. The company also improved management and support for Android and Apple devices.
Second, BBM for Android and Apple were updated to support BBM Channels. Channels let users read posts while chatting with contacts and the channel moderator. Voice chat was added, which will let users make calls among BBM contacts without using precious minutes. Glympse works like snapchat, but shares your real-time location for a limited time.
Third, BlackBerry is planning to add BBM Video Chat in the future. This feature is considered a superior alternative to Microsoft’s Skype, and it paves the way for BlackBerry to offer enterprise-level instant and video messaging among BBM users.
Finally, in the fourth quarter hedge fund manager Dan Loeb added a 10 million share position on the company.
BlackBerry delayed releasing BBM due to technical issues last year. While it gained solid ratings on Google Play and Apple’s app store, it could have grown its user base if the cross-platform was released sooner. BBM competes with iMessage, Whatsapp, Skype, Facebook Messenger, and Google Hangouts at the consumer level.
Wait and see
Movement in BlackBerry shares will likely be random, with huge rallies and selloffs in the short term. Longer term, as BlackBerry focuses its efforts on growing sales of BES, narrows its sales of consumer devices in the developing world, and reports respectable sales for premium devices like the Z30 or the Q10 successor, its shares will move higher.
3. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets PCs, mobile devices, and portable digital music players, and sells related software, services, and third-party digital applications. Market cap at $487.45B, most recent closing price at $543.99.
4. Microsoft Corporation (MSFT, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $313.22B, most recent closing price at $37.62.
(Written by Chris Lau. Disclosure: The author is long BlackBerry shares.)
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