On Jul 17, 2014, we issued an updated research report on
BlackBerry has delivered positive earnings surprises in three of
the last four quarters, with an average beat of 26.33%. Also, the
company reported mixed first-quarter 2014 financial results with
the top line surpassing the Zacks Consensus Estimate but the bottom
By offering a convenient, reliable and secure way of accessing
email in real time, BlackBerry has been able to successfully
differentiate its products from the other offerings in the
communications market. The company also commands a strong brand
value in the wireless PDA market, leveraging the popularity of its
push email system. Further, it holds 2,033 patents ranging from
mobile security to push e-mail in high-end smartphones.
BlackBerry's extensive and powerful patent portfolio is also
expected to support further innovation.
A major growth product for BlackBerry is its BlackBerry Enterprise
Service 10 (BES10) solution. BES10 provides flexibility,
scalability, high security and cost-effectiveness to its customers.
Recently, the company launched the BES12 platform and expects it to
generate strong service revenues in 2015.
Adding to the business activities, BlackBerry struck a licensing
) to bring the Amazon Appstore to its customers on the BB10.3
platform. The deal will also allow BB10 users to access more than
) Android applications at the Amazon Appstore.
In May 2014, BlackBerry initiated the shipment of budget-friendly
full-touch Z3 smartphones. Z3 is a joint effort by BlackBerry and
Foxconn - which will supply cheaper inventories for the
manufacturing of the smartphones. Such a strategic decision will
help the Canadian device maker to improve margins along with
capitalizing on the booming smartphone market of Indonesia and
other emerging nations.
On the flip side, BlackBerry is facing several headwinds like an
ever-increasing competitive landscape, a stagnant product portfolio
and an unfavorable product mix. The launch of Apple's iPhone also
posed a major blow. The situation deteriorated further after Google
launched its Android software and several handset manufacturers
adopted the operating system.
To worsen matters, BlackBerry's much-awaited BB10-based
smartphones failed to generate significant demand. In the fourth
quarter of 2014, the company sold just around 1.1 million
BB10-based smartphones out of the total handset sales of 3.4
million mobile devices.
BlackBerry currently has a Zacks Rank #2 (Buy). Another
well-performing company worth considering in this sector includes
) which has the same Zacks Rank as BlackBerry.
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