PEOPLE WANT A CHANGE
I'm going to make a bold prediction here (no pun intended): not only will the Q10 sell well, very well, but it will be the catalyst for the birth of high performance QWERTY phones, which will be imitated (but not as well) by the competition. BlackBerry's (NASDAQ:BBRY) decision to target a premium customer base by pricing its premium Q10 $50 above the iPhone 5 is a stroke of genius. Not only does it clearly say "we are not Apple or Samsung," but "we are for those who take their smartphones seriously." Newer customers will discover QWERTYs for the first time and realize that when you fuse a fantastic QWERTY keyboard with top-notch specs on a touch screen you get the best of both worlds. And smart elite professionals will pay for that and they will also pay for apps with no advertising. It is just a matter of time before BlackBerry's margins grow once we see a full quarter of Q10 and Z10 including the U.S. market.
Volatile for months now, many investors are looking for some signs of stability before deciding on whether to take a position in BlackBerry or not. The Z10 was a sneak peak with early sales of 1 million in Q4 with only the U.K., Canada and the UAE selling. Q1 already has a 1 million single order from Brightstar, Canadian Tire (TSX: CTC.A) has committed to the BB10 to the tune of 3000 phones and Telefonica received a loan of $265 million from the Canadian government for BB10 devices. The German government has ordered 5000. And this is before the Q10 went on sale. What happened when the Q10 went on sale exclusively at Selfridges in the U.K. on April 26? Thirty thousand page views on the website in the first two days, Q10 sold out in two hours and law firm Clifford Chance ordered 1600 Q10 and Z10 alone. And we have four more devices coming this year alone (that's four in eight months)!
BlackBerry stock rose almost 5% alone Tuesday on excitement of Q10 sales only to recede somewhat Wednesday due to profit taking. With no debt, a positive cash flow, well received phones, a slick new operating system, a massive potential for a short squeeze and four more new devices coming, I would say the current price of $15.50 will look like a steal by the end of this year.
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.