BlackBerry (NASDAQ:BBRY) has long struggled to find a foothold in the tablet market. Most recently, its PlayBook shipped a mediocre 370,000 in Q4 vs. about 14 million iPads from competitor Apple (NASDAQ:AAPL).
The 370,000 looks even worse compared with millions more Android-powered devices like the Google (NASDAQ:GOOG) Nexus, Samsung (PINK:SSNLF) Galaxy and Amazon (NASDAQ:AMZN) Kindle Fire. Even the upstart Surface from Microsoft (NASDAQ:MSFT) has managed to find traction with roughly 1 million units sold in the quarter.
But hey, if at first BlackBerry doesn’t succeed … it can blame the entire product category.
On Monday, Blackberry CEO Thorsten Heins doled out this money quote:
“In five years I don’t think there’ll be a reason to have a tablet anymore.”
That’s an interesting take, and one akin to the idea that baseball is an inferior sport just because you can’t hit a curveball.
It’s also a sign that BlackBerry is even more out of touch with consumers than originally thought — and that there’s even less room for error with its recent relaunch of its BB10 operating system.
The PlayBook has always been a big hole in the BBRY ecosystem, and this comment shows capitulation on the entire tablet space. Either the iPad or Android devices will win out, or Microsoft will make inroads into an enterprise niche for tablets.
So what’s left if the Z10 and Q10 don’t catch on? Some patents and a little bit of cash as the company circles the drain?
This is not to say BlackBerry’s smartphones won’t catch on in the enterprise space as many analysts have predicted or connect with consumers as many BBRY developers hope. In recent earnings, BlackBerry reported that it sold 1 million Z10s, which topped expectations.
But can they pull the company along alone — especially after such a fall from grace? And how will momentum play out post-launch?
BlackBerry stock has rallied strongly in 2013, up 40% since Jan. 1 and up almost 120% in the past six months. However, BBRY remains down almost 90% from its 2008 peak and there are serious concerns about how many more lives the company has left.
The all-or-nothing nature of the new Z10 and Q10 mean that BlackBerry stock is very risky in the short-term, and the rather myopic view of its CEO on tablets shows that the company might not have many more tricks up its sleeve.
Of course, nothing is stopping BlackBerry from revamping its tablet anyway despite these overtures. Steve Jobs famously said that a smaller version of the iPad would never sell. And lo and behold, what did Apple do once the smaller Amazon Kindle Fire started selling like hotcakes? That’s right — eat its words and launch a smaller iPad Mini.
But emulating a post-Jobs Apple struggling to find its way is not exactly an encouraging analogy for BlackBerry.
- There were reports of very high rates of returns for the Z10 a few weeks back, but BlackBerry vehemently denied them. (WSJ)
- I still think BBRY is going to $10. (The Slant)
- On the flip side, why BlackBerry stock is still cheap. (TechVibes)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.