BlackBerry (BBRY) Inc. has lost market share in the consumer and enterprise segments throughout the last several years. With the release of its BlackBerry 10 operating system they had hoped to regain a grip on the market. Investors are awash with skepticism, however, since the launch hasn't gone as smoothly as a lot of them expected, especially in the United States. Although there are both bearish and bullish indicators for BlackBerry's performance in the market, there has been recent news that may signify a BlackBerry comeback.
Analysts Change Their Minds
As I mentioned in a previous article, early-bird analysts looking at BlackBerry 10 sales found them to be underperforming. Now, several analysts are making a bull claim about BlackBerry 10, citing several reasons for the Canadian phonemaker to retake its lost market share.
Analysts at Pacific Crest formerly stated that BlackBerry 10 would sell only a small portion of the amount of phones that Wall Street expects. They pegged an estimate at 300,000 sales compared to one Street estimate of ~1 million. Pacific Crest has continued to evaluate the sales of the flagship smartphones, and they have decided that the phones are selling well after all. According to the report: "… the Z10 has grabbed about 10% to 15% of the high-end smartphone market and around 5% to 8% of the total market in the U.K. … in Canada …15% to 20% of the high-end smartphone market." The firm also stated that inventory pileup is huge in the UK, with several phone distributors offering discounted prices. Crest expressed concern for BlackBerry's gross margin with these discounts, but said that such high inventory indicates a healthy demand for the Z10 smartphone.
Notable Enterprise Pickup
Companies have long been in the process of slashing BlackBerry use, opting for other phones and bring-your-own-device policies. Not all is lost, however. The Federal Office for Information Security of Germany just approved a deal that would have half of its employees back on BlackBerry. While the scale of this deal wasn't very large, it shines through because high-level officials are willing to use BlackBerry's devices. This goes to show that BlackBerry is still the king of securing your information, and other enterprises may begin to follow suit.
BB10 Attracting New Customers
It's expected that a large portion of the people purchasing BlackBerry 10 devices are switching from an older BlackBerry. According to BlackBerry, however, more than a third of the people who have purchased a BlackBerry 10 handset in Canada have been new to the platform. This means that BlackBerry 10 is taking sales away from Android and iOS, which can mean nothing but good for the corporation. Although Canada, along with the U.K., have long been BlackBerry's most loyal markets, the fact that people are willing to switch over from other smartphones is a great sign of what's to come.
Pending United States Release
As I mentioned previously, you can't purchase a BlackBerry 10 smartphone from a major carrier in the United States. This is because of the longer quality testing done by carriers here. BlackBerry handed its phones over to US carriers around the same time that they began giving them out internationally, and this has pushed the launch of BB10 in the States back several months. It's now March, and BlackBerry 10 is almost here. BlackBerry 10 will be supported by AT&T (T), Verizon (VZ), and partly by Sprint (S). The United States high-end telephone market is one of the largest in the world, with more than ~165 million smartphones used on a daily basis. If BlackBerry can acquire just a small portion of the thriving market, it will become highly profitable.
BlackBerry might just have what it takes to come back strong. The stock is currently valued at $13.35, smack in the middle of its 52-week range. If the corporation can continue to sell well abroad and have a good launch in the U.S., the stock will jump much higher than that. BlackBerry Inc. also has a very healthy, debt-free balance sheet. Going long BlackBerry right now could make you money down the line.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.