By Adam Levine-Weinberg, The Motley Fool
Filed under: Investing
For a prominent company that’s frequently in the news, BlackBerry is one of the most misunderstood stocks in the market today. Too much attention focuses on the company’s past missteps — which allowed Apple and Google to rapidly overtake it — rather than BlackBerry’s future prospects. Similarly, now that the new BB10 OS has come to market, too many people are focusing on the success or failure of the Z10 (BlackBerry’s first BB10 device) rather than the ecosystem’s overall potential.
To be “successful,” the Z10 would need to sell perhaps 2 million units per quarter — just a tiny fraction of Apple’s iPhone sales or Samsung‘s Galaxy S series sales. However, even that level of sales is not necessary to justify a higher valuation for BlackBerry, because the Z10 is just a small part of BlackBerry’s future. The much more important Q10 smartphone — equipped with BlackBerry’s signature QWERTY keyboard — is just hitting the market now. Furthermore, BlackBerry CEO Thorsten Heins has already revealed that lower-cost BB10 smartphones will come to market later this year, probably in the fall. Extremely low market expectations and a strong product roadmap will most likely combine to generate strong returns for BlackBerry investors.
Cheap stock
The investment case for BlackBerry is straightforward. First — and most obviously — the stock trades for $15, which is below book value. In other words, the company is priced to never earn a profit in the future and eventually go bankrupt. This is a big change from 2011, when the stock peaked above $70, or 2008, when BlackBerry shares briefly traded for more than $140:
BlackBerry 10-Year Price Chart; data by YCharts
To put it another way, for the past year, investors have been able to buy BlackBerry stock at prices that had not been seen since the company was a small start-up.
Great product
Second, BlackBerry has a competitive product again. The BB10 operating system is great for multitasking and includes several unique features that may appeal to current iPhone or Android users. Many people already claim that iOS is getting stale and that Apple has lost its touch for innovation since Steve Jobs passed away. More recently, Samsung’s Galaxy S4 has underwhelmed many reviewers, who see it as a great phone, but not a big improvement over the SIII.
In all likelihood, most iPhone users will stay within the iOS ecosystem, and most Android users will stay within Android going forward. But consumer desires for something “fresh” could drive a significant number of people to BlackBerry over the next couple of years. This may get BlackBerry to only 10% market share, but the smartphone market has grown tremendously since the original BlackBerry went out of fashion. Today, having 10% market share would involve having BlackBerry sell more phones than it did at the peak of its popularity.
Loyal user base
Lastly, BlackBerry has an extremely loyal high-end user base of 20
Source: FULL ARTICLE at DailyFinance





