As of Sep 5, we maintain our Neutral recommendation on
), ahead of its second quarter 2014 financial results.
BLACKBERRY LTD (BBRY): Free Stock Analysis
NOKIA CP-ADR A (NOK): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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Why Kept at Neutral?
BlackBerry 10 (BB10)-based Z10 smartphone is now available in 147
countries. BB10 QWERTY devices have started gaining traction in
the last couple of months and are currently accepted by over 320
telecom carriers across the globe. Q10 smartphone is available in
96 countries and will be launched in another 50 countries in the
ensuing second quarter.
A major growth product for BlackBerry is its BlackBerry
Enterprise Service 10 (BES10) solution. This is a cross-platform
product interoperable with Apple's iOS and Google's Android.
BES10 provides flexibility, scalability, high security and
cost-effectiveness to its customers. As of now, more than 18,000
enterprises are using BES10.
By offering a convenient, reliable and secure way of accessing
email in real time, BlackBerry has been able to successfully
differentiate its BlackBerry products from the other offerings in
the communications market. BlackBerry commands a strong brand
value in the wireless PDA market, leveraging the popularity of
its push email system. BlackBerry holds 2,033 patents ranging
from mobile security to push e-mail in high-end smartphones.
Moreover, strong cash position and a debt-free balance sheet will
tend to act as tailwinds for the company going forward.
On the downside, we remain concerned about the company's recent
decision to change the business model of its high-margin services
fees segment. As per the new structure, the company will benefit
from subscribers who opt for services like greater security while
the other customers will generate little or no service revenue
for the company.
Furthermore, BlackBerry is facing stiff competition from low-cost
smartphone manufacturers, which we believe will continue to hurt
profitability going forward.
Currently, BlackBerry has a Zacks Rank #3 (Hold).
Other Stocks to Consider
Other stocks in the telecom industry include
). All three stocks currently have a Zacks Rank #3 (Hold).