It was only yesterday that I penned a piece talking about why I bought more BlackBerry (BBRY) just two days ahead of earnings. If you're looking for more information on that, or a little bit of what I'm expecting from this quarter's earnings, you can check out the piece I penned yesterday here.
Little did I know that news was going to be on its way this morning, however.
Of course, we're all waiting on the announcement of the coming Amazon (NASDAQ:AMZN) phone - a device that I've had a muted response to, to say the least. I'm not quite sure how well a phone slated for Amazon users is going to do, regardless of whether or not its in 3D. We'll have to see how the company plans on leveraging it today, when they announce it officially.
However, what I am excited about is BlackBerry introducing itself into some small kind of partnership with any kind of company that has a massive consistency and enormous market cap like Amazon does. This morning's news was a big deal, and points to the beginning of a budding relationship between Amazon and BlackBerry, perhaps. Seeking Alpha reported:
- Amazon (AMZN) Appstore will be available with the launch of the BlackBerry (BBRY) 10.3 operating system this fall.
- BlackBerry has about 130K apps, but is missing key ones like Pintrest, Netflix, and Groupon, all of which Amazon - with roughly 240K apps - has access to.
- "I do not have to spend time, energy and money" developing apps Amazon offers, says CEO John Chen. "Given I want to financially turn around the company and focus on the enterprise space, this is perfect for us."
Obviously, this is a big deal for BlackBerry, aligning themselves with someone like Amazon who has the name power and the customer base to give BlackBerry a potential shot in the arm in terms of both branding and customers. The future prospects here are also what has piqued the interest of traders this morning, it would seem.
I wrote yesterday about how much I liked the cheeky demeanor of John Chen:
Aside from being cheeky in nature and genuinely seeming like he's having a good time meeting the challenge of saving the entire company, Chen's business track record and lack of emotional attachment to anything BlackBerry means he's in a great position to make the tough decisions that I believe will be the backbone of saving this company.
His quote today with regards to this little partnership sums up what I love about the guy:
"I do not have to spend time, energy and money" developing apps Amazon offers, says CEO John Chen. "Given I want to financially turn around the company and focus on the enterprise space, this is perfect for us."
I'm as surprised by the news coming out today as I am that I never thought to pin the two companies together in any regard. BlackBerry is an old dog in the cell phone market, Amazon is coming out trying to compete against Apple and Samsung, who currently hold the majority of the smartphone market. Both of these companies need whatever help they can get, so why not work together?
What interests me about this deal isn't the fact that Amazon apps are going to be available on BlackBerry phones - that doesn't really concern me too much. What does concern me is the fact that people at Amazon are working with people at BlackBerry. It may be in a small facet right now, but e-mails have been exchanged and phone calls have been made between the two companies, no doubt. We'll have to see if this ultimately bears fruit for years to come, but it's the most promising name that BlackBerry has partnered with on anything - regardless of how big or small - in a while.
Could this be a precursor for further partnership prospects in the future? If BlackBerry starts to get a hold in emerging markets, could it help expand Amazon's international sales breadth? If the Amazon phone takes off, could they introduce BlackBerry hardware into the deal somehow?
Could this be the beginning of a long-term beautiful friendship?
I continue to argue that BlackBerry could see over $10 after earnings this week. If the company meets or exceeds the same amount of smartphones sold last quarter - helped by the Z3 Jakarta - the company has a damn good chance of breaking even for the quarter. If it breaks even, it's likely the market is going to stop valuing the company as it does now - priced for certain death.
Further, from an IR standpoint, I can't see Blackberry releasing this news today if they had a lack of talking points coming tomorrow. If earnings were going to be horrible, wouldn't the company couple this news in with the announcement tomorrow so that there would be some positives? Are they going to be able to "outdo" this news tomorrow?
BlackBerry stock has moved up to $8.44 on major volume in pre-market trading - nearly a million shares have changed hands with 45 minutes left until the market opens.
Disclosure: The author is long BBRY. 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.
Additional disclosure: I am long BBRY and have an options straddle on AMZN (I hold both puts and calls long).