- BlackBerry device roadmap confirms devices will target four market segments.
- "Passport" device has strong interest from users.
- Roadmap still incomplete: positive and negative implications.
Confirmation from a leak that the device line-up for BlackBerry (NASDAQ:BBRY) for 2014 includes the Passport and Classic device should come as no surprise to investors. The market is actually discounting any success the company will have for its new devices. BlackBerry's stock peaked at $11.65 in early July, and closed at $10 Monday. Even though there is little to expect from the former smartphone champ, BlackBerry's roadmap confirms the company's progress for the BB10 is on solid footing. The company is identifying its four market opportunities and target segment in both the consumer and business markets. Against this backdrop, BlackBerry is defending its market share in mobile device management against firms like MobileIron (NASDAQ:MOBL).
BlackBerry's roadmap confirms the release of two devices in Q3: the Khan and Windermere, also known unofficially as the P'9983 and Q30 (Passport). The Khan was a joint effort with Porsche. It will have 3GB RAM, a 1.7 GHz dual-core processor, 64GB storage, and a 3.5-inch screen. There will be no TrackPad. Since it will probably retail for around USD $2,000, the device will clearly not target the mainstream. The operating system update, to version 10.3, adds a number of new user-interface features. For example, there is a "flip to wake," BlackBerry Assistant, and better folder and icon management. The operating system will also support apps made for Android 4.3.(click to enlarge)
BlackBerry characterizes its target segment as contemporary, powerful, unique, or high design:
Of all the devices introduced, interest is strongest for Passport, as indicated by the high activity for articles posted about the device on BlackBerry's blog. This device has the advantage of being uniquely shaped and having enhanced gesture support on the keyboard. While the Classic might win back users who demand the trackpad, the device line-up is still incomplete. The Z30 looks set to replace BlackBerry's first all-touch, the Z10. This leaves BlackBerry without a high-end all touch device.
Caution may be preventing BlackBerry from releasing a Z30 successor that would go head-to-head against Apple or Samsung. If demand for Z30 was weak in the past, this was due to lack of marketing and limited carrier promotions. Weak sales for the Z10 were due largely to core customers wanting a device with a keyboard. The operating system in the first release was also buggy. Now that BlackBerry fixed the bugs and added more features in version 10.3, a refresh for the Z10 and Z30 devices would better guarantee current users in this group will stay with BlackBerry.
Marketing just four BlackBerry devices will restrain the company from growing market share. Despite the limitation, promoting the products will cost less: the company could run on a conservative advertising budget and maintain profitability for the devices. At the current share price, BlackBerry remains a value play with tremendous upside potential.