There was a time when BlackBerry (NASDAQ:BBRY) smartphones and network tools dominated corporate life and personal communications. However, by 2013, that age was considered over, and the average IT administrator had already assumed BlackBerry had gone the way of technology dinosaurs. However, BlackBerry as a company doesn't seem to want to go away quietly into the night. The company is still struggling to survive, but actually produced revenue growth in its first quarter 2014 results. Despite the odds, the company has managed to produce a turnaround in phone sales, begging the question: where will the new BlackBerry be in 2014 calendar year?
Staging for a Comeback?
Financially, BlackBerry definitely grabbed people's attention. In October 2013 most of the news about the company was whether Facebook (NASDAQ:FB) was going to buy the company out or if BlackBerry was going to go private. Now, the company is publicly sporting a 15 percent jump in sales versus the end of Quarter 4 2013, as well as a 13 percent jump in the number of phone units moved. The major activity is centered around BlackBerry's 10 operating system, triggering lots of replacement by diehard BlackBerry users and clients.
Now, BlackBerry is trying the Wal-Mart (NYSE:WMT) approach, trying to grab new consumers with "free" phones. Similar to how Apple (NASDAQ:AAPL) is busy unloading old iPhone 4s with $1 2-year contracts, BlackBerry is now doing the same with the 10Z models. Both AT&T (NYSE:T) and Verizon (NYSE:VZ) are offering the new phones for a dollar or less. It's a risky move. While low price phones get people's attention, it also pegs BlackBerry as a bargain competitor versus a high-end brand now.
Basic Reasons Why BlackBerry May Have a Chance
The company did finally release its OS 10 in January 2013. With new phone models of the Z10 touchscreen, Q10 and soon to be released Q5, the company has fielded a portfolio of upgrades in the year in attempt to turn around losses. The same approach is expected for the next few years as BlackBerry puts an emphasis on rolling out new products quickly, not allowing dust to settle on current phones and tools.
Secondly, BlackBerry still enjoys a solid reputation as being one of the most secure enterprise phone systems available for corporate and government use. While this has not remained attractive to the fashion-conscious consumer market, the fact is still a major selling point for companies and agencies who want to keep their communications reliable and safe. Even the U.S. President still uses a BlackBerry phone for his own personal communications. And with recent revelations about various government agencies regularly snooping on people's phones, security is all too much a critical issue for companies big and small.
BlackBerry is facing an onslaught of consumer market competition from Apple, HTC and Samsung (OTC:SSNLF). All three have dominated the individual account market. However, BlackBerry still has the respect of security-conscious IT administrators in corporate and government land. Further, its latest phones are finally coming out with competitive features to graphics-conscious users. However, BlackBerry has a very high hill to climb to get back "in the game." The company needs to become a viable brand to consumers again to leverage its significant market dollars the way Apple does currently. However, going cheap may backfire as well and put the final nail in the coffin for the once-recognizable smartphone name.
While the company is on the right track with continuing to put emphasis in new product development, and bringing those new ideas to market as quickly as possible, its brand is still suffering bruises and smirks. Until BlackBerry can figure out how to turn around a general attitude that the company is a dinosaur, it will continue to be in the back of pack versus competition. As a result, it's critical for BlackBerry to not just come up with yet another new phone, it needs to produce a new age phone that represents a game-changer. It needs to be the next bigger and better mousetrap. If BlackBerry's management doesn't see this goal as the most critical one on the board, then the company will slowly migrate to a has-been.
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.