Is BlackBerry Finally Exiting Hardware?

Sep. 13, 2016 12:39 PM ETBlackBerry Limited (BB), BB:CA399 Comments
Bill Maurer profile picture
Bill Maurer
33.75K Followers

Summary

  • DTEK50 prices on Amazon have fallen since launch.
  • Company offering 40% discount on phone accessories.
  • This month was supposed to be deadline for profitability.

I've written a substantial number of articles in the past, discussing the decaying hardware business of BlackBerry (BBRY). With the company wanting to focus its future on the growing software and services segment, phone offerings have not done well. This month was the target for hardware profitability according to CEO John Chen, and without the division making money, the company would finally leave hardware. Some recent signs may make you wonder if this decision has already been made.

The first item to point out is in regards to the company's newest phone, the DTEK50. BlackBerry launched this phone at $299, and it started shipping the second week of August. It was not compatible on all US carriers, and there were only a few locations that were actually selling it. Amazon (AMZN) was one of those sellers, and the phone initially was selling for just under $330. However, as you will see in the chart below, the cheapest DTEK50 device on Amazon has continued to come down over the past month, now going for less than $280.

(Source: Amazon DTEK50 search)

The other interesting item to point out is that BlackBerry is running a large sale on its own site in regards to phone accessories, seen in the image below. This sale isn't just limited to one or two items, it goes across all products, like cases, batteries, chargers, audio items, etc. Even the MP-12600 charger that was going for $59.99 after the DTEK50 launch (after the free bundle offer expired) can now be had for $35.99, and if you spend more than $75, you also get free shipping.

(Source: BlackBerry shop site)

While it is hard to read in the image, the offer expires September 27th. That just happens to be the day before the company is expected to report

This article was written by

Bill Maurer profile picture
33.75K Followers
I am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have been active in the markets for several years, and am primarily focused on long/short equities. I hold a Bachelor of Science Degree from Lehigh University, where I double majored in Finance and Accounting, with a minor in History. My major track focused on Investments and Financial Analysis. While at Lehigh, I was the Head Portfolio Manager of the Investment Management Group, a student group that manages three portfolios, one long/short and two long only. I have had two internships, one a summer internship at a large bank, and another helping to manage the Lehigh University Endowment for nearly a year. Disclaimer: Bill reminds investors to always do their own due diligence on any investment, and to consult their own financial adviser or representative when necessary. Any material provided is intended as general information only, and should not be considered or relied upon as a formal investment recommendation.

Disclosure: I/we 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.

Additional disclosure: Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information, and not relied on as a formal investment recommendation.

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