On the Homefront with BlackBerry
By: Nicholas Ivanecky
The start of this New Year has been an interesting one for formally known company Research in Motion Ltd. [NASDAQ:BBRY] as the company had finally awoken from its deep sleep to compete with Apple, Google, and Windows. Their product launch for the BlackBerry Z10 on the 30th of January spurred many new opportunities to grow the company. But would that be enough to bring in new and returning customers back to the critically acclaimed Blackberry that introduced the world to smart phones?
The launch in late January was a successful in the eyes of Thorsten Heins, CEO of BlackBerry, as he spent the last year overhauling the company, cutting 30 percent of its workforce to save $1 billion and restructuring the sales and marketing for this launch. His efforts were seen by investors late September that caused the stock to double. Moreover, investors reacted differently when they saw the new models of Blackberry Z10 and the delayed release to the U.S. on its launch causing their shares to fall 12 percent.
What does BlackBerry need to do next? It needs to continue improving its products not only for consumers, but for enterprise clients. They have obtained FIPS 140-2 certification for Blackberry 10 to meet strict security requirements for government agencies and enterprises. But most of their cliental is in the U.S. where the BlackBerry is currently not in stores. Its odds of selling in the U.S. are slipping away especially when Android will announce their Galaxy S4 on March 14 which could have enterprise software. Consumers and firms could quickly shift focus on this new product and forget about BlackBerry. Blackberry needs to maintain and grow its 80 million subscribers and stop playing it safe in this overly-competitive market.
If BlackBerry wants to see profit for their future, they need to start using cash wisely and start building their next mobile product or new disruptive technology. From their Q3 earnings, they showed decreasing profit margins, return on assets, and return on equity suggesting a slim chance of profit.
As a recap the new BlackBerry 10 caused a surge in stock price in events leading to the launch; however, their stock plummeted from reaching highs of $18 to the current price of $13.26. Some important dates to consider for Blackberry are their Q4 BBRY Earnings Report to be released March 28 and late March for their release in the U.S. market. Only time will tell if this finally awoken cell phone maker will establish itself again in this competitive smart phone market. Google’s Android currently tops U.S. smart phone sales with 49.4 percent, iOS garnered 45.9 percent, and Windows Phone at 3.2 percent.