Blackberry... Promising News, Finally!
Andrew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Before today, I can't remember the last time I'd seen or heard any upbeat news about Blackberry. For several years now, Research In Motion (NASDAQ: BBRY) has been the laughing stock of the smartphone industry. Read this article published just last month poking fun at the failing company. Many tech writers essentially pronounced the company dead. Here's a classic example. They couldn't do anything right. Apple's (NASDAQ: AAPL) iPhone pretty much singlehandedly crushed the once mighty Blackberry in the smartphone market. The iPhone was released in 2007 and RIM's shares peaked in 2008 at around $140. It was pretty much all downhill from there for RIM. Apple sold over 125 million iPhones in fiscal 2012. Apple is also well positioned to sell 200 million iPhones in 2013 alone, despite the slightly underperforming iPhone 5 sales.
Then smart phones running on the Google (NASDAQ: GOOG) Android platform got in the mix and really kicked the wounded Blackberry horse when it was already down. Although Google's stock recently dropped roughly 9% in one day due to a premature earnings report that badly missed analysts expectations, there was strong revenue growth in mobile advertising, further indicating how quickly the smart phone industry as a whole is growing. Google pulled in about 8 billion USD in mobile revenue, compared with only 2.5 billion the year before.
Last week, shares of RIM were trading at well under 7 bucks. This is even more disheartening considering the fact that the smartphone market has been white hot since 2008. Both Apple and Google have soared since RIM's share price peaked. RIM has had the exact opposite experience.
Since it's peak in 2008, RIM has seemed completely and utterly lost. They've made several pitiful attempts, to no avail, to gain back market share. RIM's tablet, the Playbook, was such a joke I won't even bother going into it here. Their competitive advantage really eroded when people realized that the Blackberry's supposed advantages like tighter email security and a push button keyboard weren't worth the trade off of having the tiny screen and utter lack of app selection.
They quickly went from the darling of the industry to a company fighting for its life. The BB10 is coming out in "early 2013". The company is praying it will be a "turnaround" product marking a watershed moment in RIM's comeback.
Techcruch just released an early "hands on" look at the new BB10. I'm pretty impressed from what I see. While there is certain to be a lack of Apps in the early stages due to lack of developer interest, the BB10 has the possibility of reclaiming Blackberry's spot as the smartphone of choice for business people.
The UI and UE look well thought out, especially for business purposes. A great typing experience has always been a key feature for business professionals; perhaps the most important feature since they spend a lot of time on the go firing off business emails. Apparently, the BB10 has a great system for recognizing and anticipating what people really want to type which will increase speed and reduce errors. The "Flow" between Apps is another important feature that the BB10 is taking advantage of. The new phone looks sleek and sensible. It won't be the phone choice for gamers and people who like to download hundreds of silly apps, but it could be a big seller with people who want to use a smart phone mainly for the things people want to use smart phones for. The BB10 seems to focus on what's important and forget about other features.
Here is the link to the "hands on" Techcrunch article and video I mentioned above. It's definitely worth taking a look at and seeing what you think of it. At this point, all we can really do is speculate how the market will react to it, but I'm surprisingly optimistic. Analyst's expectations have been very low for this stock, so barring no major slip ups between now and release date, it looks as though RIM may be back on track for somewhat of a comeback. I believe they'll also get a bit of help from sympathetic customers who love an underdog story.
One smart thing this company has been doing recently, is competing in fast growing but less competitive smart phone markets like Latin America and even Africa. It's probably an emotionally difficult decision to realize you can't compete with the likes of Apple and Google, but for RIM, it is probably a wise business move. It's much better to be a big fish in a small pond than it is to be a minnow in a shark tank.
Canadians will be sympathetic to RIM. I believe many will buy out of national pride since it's one of the best ever Canadian tech companies. Time will tell, but it's the first time I've felt remotely optimistic about RIM in years.
RIM still has a long way to go and they are far from out of the woods, but if you have any appetite for risk, there could be a huge upside here.
If you liked this article, you may be interested in my international investing blog
AndrewBest232 owns shares in both Apple and Google but not in Research in Motion. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
