BlackBerry (NASDAQ:BBRY) has been treading water lately, but the smartphone maker could be a good position for investors. The market has not been too bullish about the company as of late -- and in fairness there hasn't been much reason to be. When the BlackBerry Z10 debuted, AT&T (NYSE:T) didn't even put up signs in many of its stores, and BlackBerry itself trailed the news of the smartphone release with talk of a newer model, the Q10. In response, enthusiasm faded, and Goldman Sachs downgraded the company to "neutral" from "buy," and set a price target of $17.
Things Looking Up for BlackBerry
But, things may be looking up for BlackBerry. Right now, the company is trading at $16.22, up nearly 4% at mid-day, on a 52-week range of $6.22 to $18.32. The bump seems to be the result of the strong Q10 debut.
Initial demand after the Q10's launch this weekend in the UK was impressively strong, prompting popular British retail chain Selfridges to say that the Q10 launch is their:
fastest-ever selling consumer electronics product.
While, as noted by the Wall Street Journal, it really is:
unclear what exactly that means for a department store better known for selling clothes,
I think it speaks volumes given that:
at Selfridges, the Q10 is currently up for grabs for 580 pounds, or nearly $900.
and the phone still sold as well as it did. Chief Executive Officer Thorsten Heins:
We have very, very good first signs already after the launch in the U.K. This is going into the installed base of more than 70 million BlackBerry users, so we have quite some expectations. We expect several tens of millions of units.
Innovate to Dominate
The new Q10 has a physical keyboard -- a unique offering in today's market -- but that could be the point. Then, there is the technology to consider. Heins said:
In five years, I see BlackBerry to be the absolute leader in mobile computing -- that's what we're aiming for. I want to gain as much market share as I can, but not by being a copycat.
When BlackBerry launched the Z10, Heins said:
The company's new software isn't just for smartphones. The company is working on ways to make the phone work with tablets and other computing devices. To me, this is not just the next smartphone. This has the power of a laptop. This is not just a smartphone anymore. This is your personal computing power. Think about what you can do with that. How many personal computing devices do you carry? Why not unify this to one device that executes all your computing needs?
But, then again, maybe BlackBerry has a different client in mind altogether.
The End of Tablets
ABC News reported:
BlackBerry wants to be the company that figures out how people can consolidate all their computers. Instead of having a tablet, laptop and desktop that synchronize with software, Heins believes the phone can power it all.
In fact, CEO Thorsten Heins, in an interview yesterday at the Milken Institute conference in Los Angeles, predicted that the tablet market is on the way out.
In five years I don't think there'll be a reason to have a tablet anymore. Maybe a big screen in your workspace, but not a tablet as such. Tablets themselves are not a good business model.
Hmmm... Big screen in the workplace you say?
BlackBerry has long been a staple of institutional clients -- be they in government or large corporations. True to form, the company recently secured an order for 3,000 smartphones from retail chain Canadian Tire. The sporting goods and auto parts retail chain will begin distributing the phones to its employees later this month. The order, which was for the Z10 and Q10 models, may be in line with what BlackBerry had been aiming for all along -- corporate orders.
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.