Why BlackBerry's Momentum Has Turned Around

| About: BlackBerry Ltd. (BBRY)

BlackBerry's (NASDAQ:BBRY) unexpected 4Q profits and the shipment of over 1 million BlackBerry Z10s in late March raised the hopes of many investors that BlackBerry would finally have a sustainable turnaround. However, despite this news, BlackBerry's stock hasn't regained the momentum that drove its share price past $18 in January. What is the reason behind this? BlackBerry's upward momentum was a result of hype rather than producing a superior product. Take a look at how the Z10 and Q10 stack up against the Apple (NASDAQ:AAPL) iPhone 5, top Google (NASDAQ:GOOG) Android phones, and the Nokia (NYSE:NOK) Lumia 920.

BlackBerry Z10

BlackBerry Q10


iPhone 5

Samsung Galaxy S4


Nokia Lumia 920


4.2-inch (1280x768)








5.0-inch (1920x1080)























Dual-core 1.5 GHz Krait

Dual-core 1.5 GHz Cortex-A9

Dual-core 1.2 GHz

Quad-core 1.6 GHz Cortex-A15 & quad-core 1.2 GHz Cortex-A7

Quad-core 1.7 GHz Krait

Dual-core 1.5 GHz Krait









8MP Rear

2MP Front

8MP Rear

8MP Rear

1.2MP Front

13MP Rear

2MP Front

4MP Rear

2.1MP Front

8MP Rear

1.3MP Front


16GB Internal

16GB Internal

16/32/64GB Internal

16/32/64GB Internal

32/64GB Internal

32GB Internal


$199 on contract

N/A (April expected release)

$199 on contract (16GB)

N/A (April 26th expected Release)


$99 on contract

Source: GSM Arena

The Z10 is the flagship phone for BlackBerry's new 10 OS, and its main competitors are Apple, Google, and Microsoft (NASDAQ:MSFT) operated smartphones. With its 4.2-inch display and rectangular form factor, the Z10 is a monumental leap for Blackberry into the modern smartphone arena. Its tech specs are for the most part comparable to its competitors, with its most impressive feature being its 1280x768 display, which is better than the current generation of smartphones, but will soon be beaten by the 1080p screen of the upcoming HTC One and Samsung (OTC:SSNLF) Galaxy S4. Other than that, it has a fairly standard 1.5 GHz dual-core processor, 16GB internal storage, an 8MP rear camera, and 4G LTE connectivity. Thus, on tech specs alone, it would be hard to argue why a consumer would buy the Z10 over its competition, especially as a latecomer.

In terms of software, and user experience, the Z10's BlackBerry 10 OS is a welcome upgrade over BB7 feeling more like a fluid OS like Apple's iOS, Google's Android, or the Windows Phone OS. It is very gesture-based like other smartphones operating systems; swiping in various directions or locations will bring up different programs and interfaces. The most important of which being BlackBerry Hub, the aggregate information center of the phone. However, the primary downside of this new OS, is the lack of quality apps in the BlackBerry World store, a similar problem that both Windows Phone and Android faced in their early stages.

The BlackBerry Q10, on the other hand, is similar in form and function to the "traditional" BlackBerry smartphone, with its tactile QWERTY keyboard below its 3.1-inch display. The Q10 is a welcome upgrade over the previous BlackBerry Bold and Curve, as it features a larger screen with a relatively high pixel density, and runs the 10 OS like the Z10. As such, this phone will appeal to BlackBerry loyalists that cannot give up their physical QWERTY keyboards. However, the Z10 not the Q10 will determine the fate of BlackBerry because a "traditional" BlackBerry has already lost its appeal to the mass market.

BlackBerry faces another problem, it needs to change consumer perception about its once dying brand. According to recent consumer surveys, 71% of consumers said they would never purchase a BlackBerry under any circumstances. Another survey showed that 82% of Americans had no idea that BlackBerry 10 had even launched. BlackBerry still has a lot of work to do to convince the vast majority of consumers that it has reinvented itself and become, once again, a serious competitor in the smartphone industry.

Bottom Line

BlackBerry's recent gains are more a result of hype than of superior products. The BlackBerry Z10 and Q10, although significant upgrades over previous BlackBerry smartphones, have nothing particularly special that vastly differentiates them from smartphones already on the market. Even worse, the next generation 1080p Android smartphones will make the new BlackBerry's look outdated within a couple of months. Although BlackBerry may live to fight another day if it manages to keep BlackBerry die-hards and corporate clients onboard, I believe the hype surrounding the Z10 and Q10 is short-lived and BlackBerry's stock may once again stagnate and gradually decline.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

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