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BBRY Deathwatch – BlackBerry Market Share in U.S. Falls to a Mere 0.4%

BlackBerry (BBRY) has been a disaster for quite some time, but the latest report on its U.S. market share might surprise even the bears.

bbry stock blackberry logoKantar Worldpanel ComTech just reported that BBRY devices have seen market share fall from an already disappointing 0.9% a year ago to 0.4%.

Even worse is that BlackBerry market share has fallen from double digits in big emerging markets like Brazil and Mexico to around 3% as of Q4.

Latin America has been one of the few bright spots for BlackBerry sales in the past year after its ill-fated Q10 and Z10 launches, and to see this sole area of strength crumble is not encouraging.

It’s just further proof of what I’ve been saying for a long time … that BlackBerry is doomed, and that it will continue to slide into obsolescence in 2014.

BBRY Stock Is a Sell (or Short)

BlackBerry sank as low as $5.44 in December, after a continued record of abysmal sales and unsuccessful efforts to sell itself to companies including Facebook (FB) and Apple (AAPL).

However, BBRY stock has snapped back to around $10 a share recently as shorts have covered and as a new CEO has taken the reins.

Don’t be fooled.

This market share report from Kantar should reinforce the notion that BBRY stock is circling the drain and that only sentiment and dead-cat bounces will lift the stock for temporary periods of strength before another flop.

Investors shouldn’t touch this in the long-term, even if there is swing-trade potential.

BBRY is burning through cash, sales keep falling and the once-dominant tech company is worth less by the hour. Customers don’t trust BlackBerry to be around and have abandoned ship, as evidenced by sales crashing 45% in Q2 and this most recent BlackBerry market share report from Kantar.

Regardless of philosophical arguments about whether you like BlackBerry smartphones instead of iPhones or Android devices powered by Google (GOOG), the bottom line is that sales numbers tell the real story.

I’ve written a lot on BlackBerry stock in 2013, and all of it has been bearish. In March, I advised buying BBRY puts to front-run a disappointing launch of the Z10 and Q10. And aggressive investors might want to get on the bearish train now to play the downside after earnings.

I recommend a similar trade now. BBRY June 21 puts at a strike of $10 are going for $1.68 right now, meaning if shares fall to $8.32, you’re at the money.

Considering we were just around the $5 range, I’ll take that bet on BBRY stock pushing below $8 in six months’ time.

If you want another trade off this trend, consider a long-term bet on Microsoft (MSFT). The tech giant and its Windows Phone continue to prove a viable No. 3 option in the smartphone space, particularly for enterprise use.

Standard & Poor’s forecasts BBRY to continue to post losses through fiscal 2016, and while the company does have $3 billion in cash and short-term investments on the books as of last quarter, that will simply keep the lights on across those years, not prevent further declines in sales.

Even if GOOG and AAPL don’t care about BlackBerry, MSFT has an urgent need to gobble up market share. Given Microsoft’s desire to get into mobile, its recent Nokia (NOK) acquisition and its desire maintain its grip on enterprise … you can expect the full might of MSFT to be deployed in this fight. 

If you have to pick sides, pick MSFT with its $83 billion in cash and short-term investments and its desperate desire to prove it can move beyond PCs.

Don’t mess with BlackBerry. This company is at best fodder for swing traders and shorts, and each new headline proves this.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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Comments
  • charlie2010

    Is this the same deathwatch bloggers were wrong about for the past 3 years?….hasnt been correct yet. Now the stock is up 40% in a month and you think they’re going out of business, again?

  • John

    Blackberry is transitioning towards being a software and services company. Their “crumbling” market share is irrelevant.

  • john

    really? the devices Foxconn carries them now and you’re writing on devices after Blackberry stated they are a Enterprise Software Company. you’re story would have weight in 2013. but apparently you’re still in the past. poor journalism. just poor

  • Jagdeep Singh

    Another Future teller lol

  • g13man

    1/27/14 BBRY June 21 puts at a strike of $10 are going for $1.68

    3/26/14 stock @ $ 9.16 June 21 puts, ask@ 1.63

  • Short Short Man

    Dorkberry and its legion of basement-dwelling acolytes is going down hard and going down fast.