BlackBerry Priv: A Step In Right Direction?

  • BlackBerry launched its first Android-based phone with embedded security features.
  • Priv allows BlackBerry to monetize its security expertise in light of the increased privacy and security awareness.
  • Emphasizing security as its added-value among the many Android phones could be the trigger for a sales boom.

It has been a rough year for BlackBerry (NASDAQ:BBRY): worldwide shipments for BlackBerry OS phones declined to only 0.3% of the market. It reported lower than expected earnings results, and BlackBerry stock was down by 30% from $12.6 to $8.08. In recent years, BlackBerry became a stock investors love to hate with declining sales, an unpopular operating system, and no clear path for growth. Analysts downgraded BlackBerry stock rating and lowered its price target, seeking a new business initiative to bring this former smartphone leader back up.
BBRY revenue chart

Source:BlackBerry revenue data by

In recent years, BlackBerry tried some options to revive its sales: it launched phones with a touchscreen keyboard, canceled them and returned to a physical keyboard, changed its operating system entirely to compete with iOS and Android, and is now releasing a new Android phone. At first glance, it’s another move towards the ultimate sink of the former Canadian giant. However, this drastic change might be just what the company needed to get it out of its ugly situation.

As shown in Chart below, Android is the most used operating system and has a wide eco-system that includes smartphones, tablets, smart-TVs, smartwatches, smart-headsets, PCs, etc. As BlackBerry OS is currently the smallest operating system among the big-4 (Android, iOS, Windows, and BlackBerry), it cannot monetize its biggest competitive advantage – secured devices and protected communication. For years, that was BlackBerry’s best sales pitch; however, with the rise of the iPhones and Android phones, consumers are looking for more than just secured devices. Moreover, there were adequate security solutions for iOS and Android that made this BlackBerry argument useless.

BBRY_Chart 1_111015

BlackBerry had to find a solution that could allow it to monetize its security capabilities while penetrating the big ecosystems of Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) or Alphabet Inc-C (NASDAQ:GOOG) Android. Last week, BlackBerry launched its Android-based Priv phone that triggered a 5% hike in stock price after the announcement. BlackBerry Priv allows the company to monetize its highly advanced security, integrated into all layers of software, by offering it to a massive audience of consumers who prefer Android on their phones.

By launching a new Android-based phone, BlackBerry is not only offering superior security compared to other security solutions but it offers it in the familiar environment of Android that most smartphone users already prefer. This is a shift for BlackBerry from offering a hardware solution supported by a dedicated operating system to a hardware solution supported by a unique Android version that leverages its security capabilities to provide a focused privacy phone.

At a time when most phones offer similar display quality, camera capabilities, and connectivity features, device manufacturers look for their added value to attract more customers. With the recent awareness for cyber security after the many security breaches for databases and phones, BlackBerry’s choice to use their security expertise as their added-value in the crowded Android market seems spot-on. In the short term, it seems like the right decision at the right time; however, BlackBerry needs to prove to investors that this is not a one-time hit. Releasing an Android roadmap could achieve that.

Lior Ronen Lior Ronen   on Amigobulls :
Author's Disclosures & Disclaimers:
  • I do not hold any positions in the stocks mentioned in this post and don't intend to initiate a position in the next 72 hours
  • I am not an investment advisor, and my opinion should not be treated as investment advice.
  • I am not being compensated for this post (except possibly by Amigobulls).
  • I do not have any business relationship with the companies mentioned in this post.
  • The information provided in this article is for informational purposes only and should not be regarded as investment advice or a recommendation regarding any particular security or course of action. This information is the writer's opinion about the companies mentioned in the article. Investors should conduct their due diligence and consult with a registered financial adviser before making any investment decision. Lior Ronen and Finro are not registered financial advisers and shall not have any liability for any damages of any kind whatsoever relating to this material. By accepting this material, you acknowledge, understand and accept the foregoing.
Amigobulls Disclosures & Disclaimers:

This post has been submitted by an independent external contributor. This author may or may not hold any positions in the stocks discussed. Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. Amigobulls has not verified the author’s positions in the stocks discussed, and does not provide any guarantees in this regard. The author may be paid by Amigobulls for this contribution, under the paid contributors program. However, Amigobulls does not guarantee the authenticity or accuracy of the information provided by the author in this post.

The author may not be a qualified investment advisor. The opinions stated in the post should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Amigobulls does not have any business relationship with any of the companies covered in this post. This post represents the views of the author/contributor and may not reflect the views of Amigobulls.

show more

Comments on this article and BBRY stock

Do share this awesome post