BlackBerry: The New Fruit In Town

Feb.13.13 | About: BlackBerry Ltd. (BBRY)

Recently, I overhead a couple of individuals at the gym discussing the future of the hot Apple (NASDAQ:AAPL) stock, and their primary concern was whether or not the tech giant was going to resurge back to its 700 + dollar prime ever again. One of them was quite elated about yesterday's performance as AAPL hit a $484 high after its disappointing earnings announcement for the past quarter. Adding to that fact, the speculation that Apple is planning on releasing the iPad Mini 2 and a new iPhone spurred the two to jointly agree that Apple will definitely surge beyond $500 and probably reach close to peak levels again sometime in the near future.

As for me, I pondered and I personally do not think Apple will ever reach $700 and I would be surprised if it even surpassed $650. Why? Because:

1) Apple has lost its desire or ability to innovate. Look at the past releases and then consider the future releases and you will see that the products are either a deviation of the original and innovative iPhone or the original iPad. And in my opinion the iPad does not deserve to be considered a total innovation as it is merely a bridge between the older iPhone and iMac, and the idea of a tablet has presided within the tech world for years. Without innovation, my dear investors, the future of any revolutionary tech company will be nothing but remnants of its glory days. Maybe the death of Jobs was more than just Apple's old CEO.

2) Apple is about to face some stiff competition from current competitors such as Google's (NASDAQ:GOOG) android platform and Microsoft (NASDAQ:MSFT) and Nokia's (NYSE:NOK) joint venture windows platform are all currently innovating and enhancing their products to increase user preferences and enhance user friendliness.

3) And lastly, my favorite reason and the reason I am writing this article in the first place- there is about to be a new player that has been sitting on the bench and now is fighting for a starting position in this mobile squad. Research in Motion (NASDAQ:BBRY), once called RIMM, has debuted its Blackberry z10 and released it to the public in Canada, U.K., and other countries in Europe. They will release the phone for retail in the U.S. sometime this spring (March) and if they succeed in winning a critical mass of the mobile user base, Apple will no longer be the sweet fruit it used to be.

During the end of January, Research in Motion revealed its creation, the z10 class of phones that includes a smart and adaptable QWERTY touch screen keyboard that quickly adjusts to the words you use and corrects for your common typing mistakes, a completely revolutionized Blackberry 10 OS, the Blackberry hub, and the peek feature. I will not bore you with elaborating on the specifics, but I will say that the Blackberry hub and the peek feature are revolutionary and innovative, and it is this sort of development that has propelled Apple to where it was a few months ago, and where Blackberry can be in the next few months if the cookie crumbles correctly. The hub allows for all forms of non-verbal communication to be received, organized, and then dispersed via one central hub. So, a user can check his/her email, text messages, Twitter, Facebook (NASDAQ:FB) chats, Gmail chats, and so on without opening more than one program. This will make the new Blackberry phone much more efficient and faster as there will be fewer programs open. Furthermore, the peek feature allows for users to split the screen so that you can check a recently received message or email while reading the New York Times on your Blackberry. On my android, to respond to a text while reading the news means exiting out of my news application, responding to the text, and then re-launching the news application. Once again, the peek feature is innovative, smart, and efficient. And o yeah, let's not forget that the Blackberry and Research in Motion are known for their security as any corporate official will tell you that they trust BBRY technology over the competitors cause you never know who's spying on you.

Wired Magazine says this about the Blackberry z10,

"Was it worth the wait? Yes -- just about. BB10 certainly offers a system that's distinctly different (the swiping) with some of the best elements of both iOS and Android. It's smooth and sophisticated as well as being very practical and easy to use once you get your head around the new way of doing things. It also has some attractive out-of-the-box security options for corporate users."

Some concerns:

For a while now, Blackberry has been sitting on the bench developing their new product for release and ensuring that the specifications and features of this masterpiece will be able to compete against the spectrum of phones already available on the market. This extended hiatus from product releases may be the Blackberry's largest obstacle to surmount if they are to integrate the new phone into the current mobile market. For most users, it will be difficult to get out of a pre-existing mobile contract and switch to the Blackberry phone- and it is a safe bet to say that most users will probably opt to stay in their current contract with whatever phone the contract subsidizes than go through the hassle and financial costs of ending the contract early to switch to the Blackberry.

Furthermore, even after the conclusion of the contract, there may be more incentive to maintain the same type of phone rather than switching to the Blackberry because users have already familiarized themselves with their old interface and switching to a new platform with new apps, new features, and a new company may simply be more work than payoff. Additionally, with the new OS platform, it may be difficult to achieve the same abundance of apps seen on the android and iPhone. Without an effective and diverse base of apps, the idea of a Smartphone loses some of its "smartness" Lastly, the traditional users of Blackberry - large corporations and enterprises demanding high security also have to undergo a large investment in order to incorporate the Blackberry back into their companies. For example, Home Depot (NYSE:HD) has replaced the Blackberry phones that company officials once used to iPhones- news came out Friday February 8.

Technical Analysis:

Click to enlarge
(Click to enlarge)

(Taken from freestockcharts.com)

From the end of September up until a few days before Christmas, BBRY or RIMM, at the time, was on a steady climb from its all-time low of $6.22 and rose to over $14.00. This also coincides with an above estimate Q3 performance as BBRY beat consensus by 37.14% demonstrating high investor confidence in the z10 release. From Christmas till now, BBRY shares has achieved a 52 week high of $18.32 and then plummeted down to $12 where there seems to be slight support. Today, BBRY closed at $15.20, down 3.37% from yesterday's close, but with a book value/share of $18.09 and a 14 day RSI of 48.42. These numbers indicate that BBRY may be receiving a bullish period in the near future. (Data obtained from msn money and marketvolume)

In Conclusion:

BBRY is far down from its glory days of trading in the 3 digit range, but that does not mean that the old dog can't learn new tricks, so to speak. Just consider Netflix (NASDAQ:NFLX) and its downfall from trading at $300 to a quarter under a hundred and then recently, with a nice earning report, a few new contracts, an original series, and a little bit of good fortune, the stock is trading nearly double it did a month ago and two-thirds the way there to 2011 highs. You never know, but with this new phone and all the new features that BBRY has developed sitting in the background may just be what it takes to propel a forgotten loser into a new big winner. On March 28, BBRY will report Q4 earnings and currently analysts are expecting -.30/share and that is expected as this quarter did not yet include the release of the z10 phones in the United States. But I would not be surprised if the earnings report for Q4 is a positive surprise as sales in U.K. and Canada have performed well thus far.

Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.