Seeking Alpha
Profile| Send Message|
( followers)  

It comes as no surprise that the share price of BlackBerry (NASDAQ:BBRY), formerly Research in Motion, is within the $12-13 range again following the Jan. 30, 2013 BlackBerry 10 launch. In the two weeks leading up to the event, the share price surged from the $11-12 range to reach a high of $18.18 on Jan. 25, only to plummet back down within the week of the announcement.

This was indeed a result of investors buying the rumour and selling the news, and also major investor disappointment of phone availability dates. The issue is that nothing new and groundbreaking was announced about the BlackBerry 10 OS and the Z10 and Q10 phones. The speculation of BlackBerry's recovery was built mainly on high expectation and excitement for the new phones.

All of the features of the new platform were already announced at the BlackBerry Jam Americas 2012 event back in September 2012. Numerous favourable reviews were already written about the developer versions of the phones. The thousands of apps ported from other platforms, and the availability of other media on BlackBerry World was already widely known.

However, the two details that everyone was watching for were either a disappointment (Z10 touch screen phone is not available in the U.S. until March), or wasn't even announced (no word on when the Q10 phone with the physical keyboard would be brought to market).


(Click to enlarge)

BlackBerry's "Innovative" Features

A lot of the features of BB10 that were announced last Wednesday may seem revolutionary to BlackBerry users, but are nothing new to Apple (NASDAQ:AAPL) and Android (NASDAQ:GOOG) users. It's possible that BlackBerry's CEO Thorsten Heins lives in a bit of a BlackBerry bubble. During the launch he announced and reemphasized features with extreme enthusiasm as though they had just discovered them, unaware that everyone outside of the world of BlackBerry had been using the features already.

As an example, people have been using their iPhones with just one-thumb for several years now, and have also been using the swipe-down notification centre where customized notifications can be seen without opening the applications.

BlackBerry does deserve some credit for several new features that are promising, such as being able to pull contact information from various social media, screen sharing, and the time shift camera. However, it appeared at the launch event that the real innovation for BlackBerry users are not so much from being able to install several applications simultaneously, but quoting Martyn Mallick, is that when you install a new app "there's no need to reboot your device!"

No "Delays" of Product Availability

While BlackBerry's reputation has been tainted by numerous product delays, it has ensured that customers will be prepared for a letdown by lowering their expectations this time around. The Z10 is available in the UK and Canada in early February, but won't be available in the United States until March. And although they announced that 70,000 applications would be available on BlackbBerry World, a lot of the popular apps such as Skype and WhatsApp are only "committed" to BlackBerry 10, but are not yet available. By the time that everything BlackBerry is promising is actually available in the hands of the consumer, copycat apps on other platforms for the new BB10 features (like the time shift camera) will have been developed, if they don't already exist.

In addition, it didn't bother to announce when the long-awaited Q10 phone with the physical keyboard would be available.

What's Next for BlackBerry

Despite the drop off in excitement and share price, it does appear that the new BB10 platform and the Z10 phone are reviving the BlackBerry brand. Now that the phones are finally landing in the hands of the consumers, investors can stop buying speculatively. In the U.K., Z10 phones are flying off the shelves, and preorders on the Canadian markets are also strong. The phones should be able to maintain a sizeable portion of the existing 80 million BlackBerry subscriber base looking to upgrade, but moreover might actually be successful at capturing the attention, or at least the consideration, of some Apple and Android users.

The change in company name from Research in Motion to BlackBerry helps to unify the hardware and software components, and better positions the BlackBerry brand on the market. Although Apple and Google will continue to dominate as No. 1 and 2 in the smartphone market for the time being, BlackBerry now has a competitive chance against Microsoft (NASDAQ:MSFT) and Nokia (NYSE:NOK) for third place in market share.

The comeback of the BlackBerry 10 operating system opens a door for BlackBerry, as Apple is the only other smartphone competitor to have control over both hardware and software of their devices. Samsung (OTC:SSNLF) is subject to the whims of Google's Android platform, and the rumours that Google is developing their own Motorola phones. Samsung (OTC:SSNLF) continues to develop their own Bada operating system to protect themselves from a potential shutout from Google's Android platform. Nokia (NOK) abandoned their Symbian OS and adopted Microsoft's Windows 8 operating system, but Google even openly admitted to blocking Google Maps and limiting Gmail on Windows 8 phones. With BlackBerry in control of both hardware and software of their device, it puts the company in a position with a strong competitive advantage once they recover from the recent decline in market share.

Investors should be confident about the company's outlook and expect slow and steady growth as BlackBerry plays catch-up, and hopefully continues to innovate.

Conclusion

It's clear that BlackBerry wasn't bluffing, and their new OS and phones are quality products that can compete with the existing market. However, the surge in share price from high expectations leading up to the launch was matched by a decline, as BlackBerry had already shown investors all their cards prior to the launch. However, with control over both the hardware and software of the BB10 system, BlackBerry still has a few aces up their sleeve that could put them ahead of competitors in the long-term.

Source: BlackBerry Wasn't Bluffing, But Already Showed Their Cards