There has been a lot of speculation regarding what is driving the price of BBRY down. What many bulls seem to forget (and bears like to pray on) is that the best way to destabilize the price of a stock is to introduce unknowns.
The few 'official' announcements over the past month from BBRY have exponentially increased the unknowns and I feel that the market is reacting to this. Yes the moves may prove to be good in the long run and have the potential to yield big returns BUT they could also backfire on the company. To make matters worse, not enough information has been released in order to project how any of these will effect the bottom line.
BBM to Android & Apple - This is a real two edged sword, since BBM is a competitive edge right now helping to drive handset sales it could hurt those sales.
Right now one big selling point of BBM is that, unlike other services (Twitter for example), it isn't bogged down heavily loaded with advertisements for revenue. Does 'free BBM' equate to 'Add Supported BBM' and if that is the case then how will that impact things?
I was surprised at the 'wide open' and 'free' move as I had expected that it would have been tied to BES 10.1... but are we talking just about the app being free or no need to pay monthly service fees?
Was this step simply taken to seal the deal for BES 10.1 adoption by the DoD and other firms to allow for the adoption of a unified messaging platform? In other words, are we looking at a strategy like that deployed by a number of successful software companies who 'give away' software for 'private use' then make their profits by charging 'corporate customers' who are required to purchase their products?
I have seen a lot of speculation regarding how this may play out but no details directly from BBRY hence unknown 'risk' for investors.
Q5 - Although on the surface this device would seem to be a positive move to stem the tide in the emerging markets, BBM is the main selling point for BBRY in these markets. People have been willing to pay more for the phone since BBM allowed them 'free communication' once the monthly talk time had been used up. Giving BBM to Android kills the competitive edge placing the Android on an equal footing to BBRY.
Given this, will the Q5 be priced low enough to compete with the $100 Android and if so what will the margins be? Only upbeat point is more of the really low priced Android phones still run on some version 2 variant of Android and BBM is reported to require at least Android 4.01.
Z10/Q10 Sales - Absolutely nothing firm has been reported officially with regards to how well these are doing.
In addition, both 'Free' BBM on Droid devices and introduction of the lower margin Q5 which I suspect will eventually make it to the North American market have the potential to cannibalize Z10/Q10 sales.
I still believe everything will work out in the end - but how these moves (in particular 'Free BBM') will improve the bottom line has not been explained... and I find that a little unsettling.
BBRY needs to take action and answer the 'investor concerns' raised by these announcements or I can see further turmoil coming. Tell us where the money is going to be coming from!
Hopefully these questions will all be answered during the quarterly report teleconference.