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A Tale Of Two Leaks: Apple`S IPhone 6 And BlackBerry's Passport “Square”

|About:Apple Inc. (AAPL) Includes:BlackBerry Ltd. (BBRY)

What the iPhone 6 looks like

When photos surfaced (for the first time) of what Apple's new phone would look like, there was much excitement. Only to be followed by the realization that they were pretty much that all the previous rumours had said they would look like.

Apple(NASDAQ:AAPL), as a company, is rather secretive about its upcoming products. That, given the company's scale, eliminates the need to generate buzz on purpose. We've been through this mill long enough now.

As previous speculations had suggested, the phone is going to have a 4.7-inch screen. A difference of a mere 0.7 inches from the iPhone 5S might not sound much but you have to actually see the difference to get the scale of the increase.

Now since one point within the previous set of rumours now appears to be spot-on, this cultivates the belief in the rest of them. More particularly, in the speculation that Apple is going to be coming out with a 5.5 inch version of the iPhone 6 later this year.

That would be good news for investors. Why?

Because with that phone, Apple(AAPL) would have moved into the phablet sector, a market that Apple has been hitherto out of.

This is the direction that (earlier) leaked memos within the company had pointed to.

And why should Apple be going into the phablet market?

  1. It's huge

Phablets' share of the overall market contributed to a full one-third of all sales during the first quarter of 2014.

  1. It's only growing

Sales of smartphones with 5 inches-plus screen sizes grew by an impressive 369% during 2013. It is estimated that by 2018, there will be one billion phablet users around.

  1. It's also where the money's at

Phablets have a one-third share of all smartphones. But when you count smartphones that cost more than $500, their share is 47%.

So, will the iPhone 6 fly off the shelves?

Which Apple product, specially in the telecom sector, hasn't sold well?

Sure, the bigger version is rumoured to be expensive. But if there is one thing Apple(AAPL) has managed to do consistently, it is sell products at higher-than-industry price points.

…and now, that other leak

So, in the same time period, the internet was also flooded with pictures of BlackBerry's(NASDAQ:BBRY) upcoming phone, which they are going to call "Passport" apparently.

This is a bit of a surprise.

We knew the direction that CEO John Chen was taking the company in. First, he was going to branch out into the mobile security market. This was a very sensible decision to make. After all, the company does already have good brand equity in the sector. And it's expected to be an $11 billion market in 2014.

And on the set front, it was going to return to the classics. After the lukewarm response to the Q10 and the disastrous response to the Z10, the plan was to return to the successful Bold series of 2010.

Where did the Passport come from?

The form factor alone is a bit gawky. Chen has an explanation for it. "A lot of old phones including some of ours is on one side longer than the other side. You look at our competitor phones and they get bigger and longer and wider. Most people are fatigued with the longer and wider designs," he says.

A hard sell, that.


End analysis

All that Apple is going to do, in addition to adding a much more powerful processor, is increase the size of the phone. And maybe tweak the shape only slightly. That's it. And the public still goes wild at the prospect. In the Apple ecosystem, merely looking at the phablet market exudes confidence. And despite that confidence, coupled with the promise of whatever gamechanger the iWatch promises to be, Apple's P/E is still a very mature 15.73. A sturdy stock, if there ever was one.

At the other end of the spectrum, BlackBerry(BBRY) has taken a pretty gutsy decision as far as design is concerned. And the response is mixed, at best.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Stocks: BBRY, AAPL