BlackBerry Q5 The Latest Reason To Go Long

| About: BlackBerry Ltd. (BBRY)

The year 2013 is going to be a year to remember for BlackBerry (NASDAQ:BBRY) shareholders and the Q5 unveiled this week at BlackBerry Live in Orlando is the latest reason to jump on the BlackBerry bandwagon.

This year led off with the January BlackBerry Z10 launch of the first smartphone powered by the revolutionary BB10 operating system, and also the first answer from BlackBerry to the growing trend of touchscreen smartphones. The Z10 launched to good reviews and sales figures with more than 55% of buyers being former Apple (NASDAQ:AAPL), Samsung (OTC:SSNLF), Google (NASDAQ:GOOG), or Nokia (NYSE:NOK) users. The Z10 was huge for BlackBerry as these are all customers who would not have bought a traditional BlackBerry QWERTY keyboard device in the past and introduced BlackBerry to a whole new market.

The Z10/BB10 launch single-handedly brought BlackBerry back into the black with the announcement in March of the first quarterly profit in years and shocking the market with how quickly the turnaround took hold. For the first time in months, the market realized that BlackBerry was not going under, and in fact was looking like it was back into a growth phase. However, the market remained skeptical and waited to see if the next phase would follow.

The BlackBerry Q10 has now followed in April/May staggered launches in the U.K., Canada, UAE, and in June in the U.S. Early reports of sellouts or product shortages in all markets are showing that the demand for BlackBerry devices with a physical keyboard is very strong, and a market that BlackBerry dominates with little competition. Reviews of the Q10 have been off the charts with regards to design, quality, and ease of use. Exact sales figures will not be known until reporting in late June with the only official quote coming from Thorsten Heins pegging anticipated sales based on demand to be in the tens of millions of devices.

The Q5 has been rumored for weeks now with many fuzzy photos of Red, White and Black versions coming across the Internet giving us a preview. Rumors about names R10?, specs, price points, release dates were fodder for all of us.

This week BlackBerry gave us the first official look at the Q5, nicely named so it is easily understood that this is a mid range device with a physical QWERTY keyboard. Is a Q1 far behind as an entry level device?

The specs of the Q5 are as follows:

  • Full QWERTY Keyboard similar to the Curve
  • BlackBerry OS 10.1 (as per Q10)
  • 2GB RAM (less than Q10)
  • 1.2 Ghz Dual-Core Snapdragon CPU (slower than Q10 1.5 Ghz)
  • 720×720 pixel LCD screen (not a Super AMOLED as on the Q10)
  • 8 GB internal memory (Q10 has 16 GB)
  • 5 MP Autofocus camera (Q10 is 8 MP)
  • Micro SD Card Slot (Same as per Q10)
  • GPS/Bluetooth 4.0/NFC (Same as per Q10)
  • non removable 2100 mAh battery (Q10 is removable)
  • no micro HDMI port (Q10 comes with this)
  • Comes in Red, White, Black and Pink

The Q5 is a definite step down spec wide from the Q10 and rightfully so. It however retains the most important features smartphone buyers want in a nice package to appeal to many tastes.

It will be priced in the $299 to $399 price, which will make it free on most 2 and 3-year contracts, and reasonably priced for those who buy it outright. A device clearly designed with emerging markets and the mid tier of major markets like the U.K., U.S., Canada etc... should start to appear in stores in July and August.

The huge impact felt last quarter by the sales of the high margin Z10 bringing BlackBerry back to profit shocked many observers and analysts. The Q10 and its higher margins have now followed and should have the same impact in the current quarter. Then the Q5, which is estimated to be a high margin device, will provide fuel to the BlackBerry fire in the next quarter. The Q5 will also begin the process of replacing the sales of lower margin devices such as the curve, which probably are selling at cost these days. This may result in earnings per share of greater than 2 dollars as is theorized in fellow SA contributor Michael Collins's article earlier this week

The BlackBerry bandwagon has been a rough ride. The stock has been moving between 13 and 16 pretty much for the last 6 months with daily swings of 5% being nothing unusual.

Bear analysts are announcing negative sales, production cuts, reports of returns with little or no foundation. These attack reports are knocking the stock down almost anytime it gets into the 15 or 16 dollar range.

Bull Analysts and BlackBerry themselves have stepped in on numerous occasions to refute and reaffirm bull estimates sending the stock creeping back up.

This little bear/bull war has provided day and swing traders with many opportunities for quick profits both on the short and long sides. It has also allowed the longs to keep accumulating at bargain prices.

Now that the Q10 will be adding to the anticipated full range of BlackBerry Devices it is more clear that this company has a clear vision of what it wants to become and is executing this vision right before our eyes. With 3 devices now out covering the full featured touchscreen (Z10), High-End QWERTY Keyboard (Q10) , and mid-range QWERTY Keyboard (Q5) we can see that BlackBerry is well on its way to executing a comeback that many believed would have been impossible only months ago.

There is limited time to get on the BlackBerry Long Bandwagon, so for those of you who have been resisting, or even short for that matter it is time to reconsider. BlackBerry is alive and kicking!

Disclosure: I am long BBRY, AAPL. 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.