Seeking Alpha
Long/short equity, special situations, event-driven, contrarian
Profile| Send Message|
( followers)  

So what's going on with the BlackBerry (NASDAQ:BBRY) stock drop this week? We have a couple of answers which are old news in our book. First, from SeekingAlpha yesterday:

More on mobile phone sales: Q4 smartphone market share by OS: Android 69.7% vs 51.3% in 2011, iOS 20.9% vs 23.6%, BlackBerry 3.5% vs 8.8%, Microsoft 3% vs 1.8%. "With Samsung commanding over 42.5% of the Android market globally, and the next vendor at just 6% share, the Android brand is being overshadowed by Samsung's brand with the Galaxy name nearly a synonym for Android phones in consumers' mind share," says Gartner.

This snippet is talking up the market-share leader Samsung (OTC:SSNLF). This is good news for BBRY. Why? because Android is bigger than IOS. Yes, and Apple (NASDAQ:AAPL) is losing market share. This is anecdotal evidence which shows the "want to go elsewhere" feeling original iPhone users are experiencing. But not to worry for BBRY. It has a plan which is to cater to its loyal base of 79 million users [maybe temporarily less by now, BBRY lost market-share too but that is not new news] first, then its old customers [this my category] who know they can build a reliable product, and then the converts from IOS and maybe Android. That is being echoed around by terminal BBRY bears like Eric Savitz, regurgitating other peoples' news. Then we have the number 1 long and tech writer at SA, Ashraf Eassa, saying that BBRY will become the next bubble stock in his latest article.

This is like blood in the water for short sellers. They start each day selling the stock down in pre-market trading [as I update this article for submission its down $.69]. Every long starts the day asking what's wrong, what don't we know. The answer is you know everything about what's going on, there is no bombshell out in smartphone land. Every early adopter and tired iPhone user like me wants one. That's what's new.

An update is out [as of January 31,2013 ] on short interest from Nasdaq showing that short interest come down a bit from 135,121,295 to 129,491,496 or roughly 5.6 million shares. Looking at trading that day:

Jan 30'13

open12.45

high 13.35

low 12.15

close 12.98

vol 111,855,800

Looks like it was a good time to close some shorts that day. We think we are close to that happening again shortly ... no pun intended. Better take this chance to cover before Carl Icahn sees value in this name like he did with Netflix (NASDAQ:NFLX). We all know what happened there.

Next, there has been a lot of articles here and in the general media about iPhone and Android app-domination. Articles in SA [SeekingAlpha] including ours have addressed the workarounds available to get apps on the new BlackBerry Z10. I received my Dev Alpha B unit from BBRY on January 30 and decided to start working on the "sideloading" of Android apps. I am about as good at this type of hacking as I am at Golf- dangerously bad, but love the challenge. Ironically, I got the idea from my favorite iPhone (which I am so tired of) app called Taptu. Setting up the new BB10 phone for me is like cleaning out my closet. A cleansing experience. First I checked to see if there was a Taptu app for Android or Z10. Guess what, there is one there for BlackBerry 10. But I started to dig in and see what I could get either from the BlackBerry World app store or from Android developers who had started to convert their apps and make them available as a .bar file download specially formatted for BB10 devices.

Truth be told, once and for all, the availability of apps is extensive and probably covers what any mortal human could want. That said, any Android app [ any ] can be converted. There is no article I have read here on SA that goes into the level of detail of getting the apps as I have now personally done. Perhaps the most telling episode with the BBRY device while writing this article was when my 8 year old son came by picked up the BB10 and promptly downloaded the Angry Birds Star Wars game. That tells it all in one sentence.

The best SA article from a technical aspect in my opinion is this one written by Greg Vousvounis. If anyone wants a tutorial there are already so many available at crackberry.com. Besides the apps, one other observation I had was that I was not as tempted to use the BB10 while driving as much as I do with the iPhone. I wait for the traffic lights and then go right to the "hub" which is so convenient for a quick message update. Here is an sampling of the type of extensive apps I found from an app developers website:


(Click to enlarge)

There are many apps that have been converted from Android .apk files to BlackBerry .bar files. Most work fine. Some need to be tweaked or have account passwords manually installed. All of the issues to me seem reminiscent of the early days of mp3 downloading. Here is my personal takeaway. An ecosystem of Z10 and Playbook users is alive and well. There are many early adopters such as myself who are having a fun, sometimes puzzling experience in the switch over.

But I and others who are posting their solutions to the problems feel that it is well worth the effort. The BB10 is not a locked down system like Apple IOS. It is a developers field of dreams. The system is open, friendly and to be blunt feels like a fresh Android environment. And with good reason. Android developers are populating their sites with converted apps for BB10. I am also accepted as a developer, but that's not I want to spend any more time unraveling. For an Android developer, its a no brainer. They can set up a machine like a factory conveyor belt and convert their entire portfolio in days. Testing them may take some more effort, but its found money for them that they can not afford to miss. Especially if there is some hack that will do it for them whether they like it or not. Why, they are open and easy to customize ... just like Android. It has a fast clean new OS called QNX. And the phone has a developer mode. The device, its not a phone, actually says "Go ahead, play with me."

Something else important happened this week in the tech space that shows BBRY is in the right frame of mind and heading in the right direction. Opera, the worlds number 5 browser maker threw in the towel and is now aligning itself with WebKit. Here is the headline from the article:

"Opera embraces WebKit in browser brain transplant"

So what, right? Wrong. So did Apple (AAPL) and Google (NASDAQ:GOOG) with their Safari and Chrome browsers respectively. And guess who makes the browser for BB10. Yes, WebKit. You see there will be no apps soon. Everything will be embedded apps in the browser. No distinction between browser or apps. Apps will soon be the new "buggywhip". Ironically, the Chrome browser is where all the "sideloading" for the BB10 smartphone is made easy at gridlock.org.

Articles calling for a long term short position in BBRY are wrong. No one has a crystal ball in technology long term. The main reason for staying power is the company's lack of debt and nearly $2.8 billion in cash. BBRY has a good long term plan and will burn the shorts in the long run.

Source: BlackBerry Shorts Like 'Angry Birds' Could Get 'Icahn'd' As Z10 Enjoys Android Halo