While their fourth quarter only included about one month of Z10 sales, and those only in a few regions, one million Z10 sales helped push the company to profitability and helped raise its gross margins from 30% to 40%.
- BlackBerry's cash position has improved.
- They remain debt free.
- They have many known sales for the coming quarter, such as Brightstar's 1M unit order.
- About 55% of Z10 buyers are coming from other platforms, which means the phone can certainly compete with Android and iOS (remember, it need not dominate Android or iOS to be a great company; it need only compete).
- BB's app base is growing extremely quickly and is currently at about 100K.
- The Q10 is soon to be released and will be particularly appealing to existing BlackBerry users.
- Lower cost BB10 units will be sold later in the year, offering opportunities in developing markets where the brand is extremely popular, such as Indonesia.
All told, Fiscal 2014 is promising.
Not Just a Smartphone Company
BlackBerry's mobile computing focus offers many opportunities for the years ahead. They are not just a smartphone company, but are focusing also on computing tools for automotive, medicine, defense and other industries. They have proved they can survive in the smartphone business alone, but BlackBerry is not a smartphone company.
A Short Squeezing Comeback Kid?
BBRY's upside is considerable. I am reminded of Apple (NASDAQ:AAPL) in 2004-2005, when shares more than sextupled as its comeback story played out.
BBRY's extremely large short float could lead to chaotic upward surges. I am reminded of the Volkswakgon short squeeze of 2008.
BBRY's downside is limited by tangible assets; its upside is considerable. Needless to say, I am a reckless bull. This quarter showed that BBRY can be profitable and survive as a company. Next quarter will demonstrate just how profitable BB10 can be. I expect shares will sell at $50 or more by the end of the year.
Can BBRY Triumph?
When I entered into a long position in the options market in December, I guessed BlackBerry had about a 30% chance of a successful BB10 launch. I reckoned that there was about a 10% chance of a real BB10 triumph. I bet on the triumph. At this moment, I like my odds.
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.