Good riddance

bbry stock blackberry
Sponsored By:

BBRY Stock: BlackBerry Users Abandon Ship at Alarming Rate

BlackBerry (BBRY) insists that it hasn’t given up on consumers. But consumers, it appears, have given up on Blackberry.

blackberry-bbry-stockWireless carrier T-Mobile US (TMUS) ran a promotion recently that allowed BBRY device owners to swap their gadget for the Apple (AAPL) iPhone 5s, with huge success. And even after some backlash from a few fanatics prompted T-Mobile to allow users to swap their BlackBerry phones for newer BBRY models, an internal memo showed that trade-ins of BlackBerries were up 15-fold on the promo.

Part of the rush was clearly because it was such a good deal. If you have an ancient device and can get an iPhone 5S for zero down, why not?

And judging by the fact that BBRY stock is up more than 35% year-to-date in 2014, investors seem to think that woes in the consumer business are either already baked in or a non-issue as BlackBerry focuses on enterprise clients under its new CEO John Chen.

But it’s still a big, black eye to see that many users eagerly running for the exits.

It might be valid to say that in regards to BBRY stock and BlackBerry investors, the news doesn’t matter much. Apple gadgets and mobile devices that run Google (GOOG) Android software have already squeezed BlackBerry’s market share down to almost zero. And lately the buzz has been about BlackBerry Messenger unlocking value for BBRY stock holders after Facebook (FB) purchased mobile messaging company WhatsApp for a whopping $19 billion.

However, I wouldn’t so quickly discount consumer perception.

After all, part of the reason that Apple is so dominant is simply because people like its products. And anyone who knows an IT manager knows that Apple has wormed its way into some companies via “bring your own device” (BYOD) policies where the employees get to pick their work-related gadgets, not the company itself.

Everyone agrees that BBRY stock has little to gain from the consumer market. But I think its brand tarnish matters — particularly as Microsoft (MSFT) takes the fight to businesses and government clients to win enterprise sales for its Windows Phone line. MSFT is steadily growing market share — even if its mobile business doesn’t pack as much punch as its legacy desktop software — and has a sense of urgency to continue this mission.

About $84 billion in cash and short-term investments doesn’t hurt either.

So while you might be inclined to write off the consumer flight from BlackBerry devices as further confirmation of old news, don’t discount what it means for BBRY stock.

If people don’t like your product, there’s a chance that their boss can demand they use it … but that’s not much of a business model if BlackBerry wants to keep its devices and software respectable in the eyes of Wall Street and IT managers alike.

After laying off 4,500 employees and focusing squarely on enterprise and government clients to keep its struggling business afloat, BlackBerry has no margin for error. And while a more than 35% pop in 2014 for BBRY stock is nice, investors should be looking for positive news to drive shares higher and prove this is more than just a dead-cat bounce.

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

Get The Slant delivered to your inbox every day!

Comments
  • Felix Ramirez

    A message to Blackberry, from a loyal Blackberry fan: Consumers want nothing but the best! Bring a high-end device to market very soon that is “High-End”. These cheap plastic devices will no-longer be efficient to “wow” the iphone and Samsung device buyers into buying a Blackberry. Small 5″ devices are not wanted any longer either. I hear alot of current iphone device owners complaining about the current size of the iphone. Your Z30 is not wide enough. We want high resolution, removable batteries, solid devices that have large screens so we can watch movies and videos. Whats up with these cheap snap on back covers? The Blackberry storm had a metal back cover, that was awesome! Consumers cannot wait for next year…you have to act NOW! The planned Q20 has a smaller screen to make room for a physical keyboard! Keeping the physical keyboard is one of the reasons Blackberry started losing buyers in the first place. Thats when Apple and Android devices were making all touch screen devices and Blackberry was stuck with a physical keyboard. Now you want to go back? I understand a few consumers might sill prefer a physical keyboard but the majority want all touchscreen. We’ve adapted. We’re not living in the 90′s anymore. High-end, High-end, High-end! Time is running out! Like the article above mentioned….Your losing us. Don’t give up either…you just need one high-end device to attract consumers again. We cannot wait forever though. Its now or never.

    • Jeriath

      Clearly you haven’t tried the Z30 yet. Its faster than the S4 and when running android applications, it runs them better than the S4, but with all the security of a Blackberry device

      • Felix Ramirez

        I agree with you completely that the Blackberry 10 operating system is indeed faster than ios and Android, and your correct, it’s also the only real secure operating system for mobile devices. Blackberry’s os also supports Flash, while ios or android does not. Thats a big plus for Blackberry. In the post above I was referring to Blackberry’s hardware.

    • Echoes

      What ARE you talking about? Time for a fact check.

      The Q10 packs a 3.1 inch screen. The Q20 is bringing a 3.5 inch screen to their QWERTY line of phones. The largest yet from them *ON A QWERTY DEVICE.* Clearly, the Q20 is NOT the device they are making for you. What you want is the Z50.

      5 inches is “small”? No it is not. But the Z50 is rumored to be going a little larger than that so there you go.

      If they go with a quad core processor for the Z50 as rumored, there’s your high-end.

      I’ll agree on removable batteries at least. But I’ll settle for “non removable but high capacity and unnecessary to change until the warranty is gone anyway and easy enough to tear down and reassemble without soldering”.

      Cheap plastic? None of these devices feel cheap. The Z10 had a pretty solid build to it and has proven itself to be durable through nearly a year of use. The Q10 felt even more solid and the Z30 is nice as well… explain why you feel that a back made of carbon fiber is cheap?

      • Felix Ramirez

        I realize after reading my own post that I wasn’t being fair to Blackberry. The quality of the BlackBerry Z30 (which I am typing on) is made with plastic that is equally as “cheap” as the Samsung Note 2 and the Samsung S4 (both of which I have upgraded from). Now both of the Samsung devices I speak of have been top sellers for Samsung, but in my mind are “made with very cheap plastic. The plastic on the side of my Note 2 broke off on the side from the screen to the volume rocker without any drop or abuse? It just broke on day.? So when I received my Z30, I wasn’t impressed to see that Blackberry decided to go with in my opinion “the same cheap snap-on plastic” that Samsung uses on their devices. It may be “carbon fiber” , but whatever it is, I am not impressed.
        The point I am trying to make is that the consumers who currently buy Android and Apple products are waiting for the NEXT Android or Apple product. If Blackberry just makes devices that are equal to the competition, why in the world would anyone switch to Blackberry? Blackberry is going to have to step it up a notch and go above and beyond what the competition is doing. If you go back to 2009, what made Blackberry owners want to switch from Blackberry to Android or Apple? I’ll tell you what made me switch…it was device memory. The device would run really slow if you downloaded a few apps or ringtones or themes or had too many messages saved. Well Android devices started coming out with gigabytes of storage that didn’t bog down the device. Screen sizes and resolutions started to increase, they had real touchscreens (Blackberry was stuck with the clickable touchscreen at the time). What I’m trying to say is by the time the Z50 or Q20, Q30 are released, they may be outdated! The tech world moves fast. Blackberry has to be faster, because the fact is Samsung and Apple buyers love their Samsungs and iphones. If Blackberry wants the competitions buyers to even think twice about switching then Blackberry cant just be equal in quality.
        I’ll give Blackberry this…the new Blackberry 10 operating system is by far the best operating system for mobile devices on the market today. But nobody knows it because Blackberry has to up their hardware and their marketing for people to at least want to pick up a Blackberry and try tryit out. Blackberry is getting a whole lot better but is it enough?

  • Echoes

    Wow. Biased much?

    Let’s see, show an ancient smashed up legacy device, reinforcing the perception that modern phones are unchanged from legacy phones. Check.

    Random paragraphs of negativity. Check.

    A complete refusal to address the reasons behind *US* customers perception of the current offerings. Check.

    Can we take a moment to point out that employees in carrier stores are untrained on BB10 devices, and actively discourage customers who come in wanting one by making immature, negative comments to steer customers towards phones they make more commission over? Or how the average American has the “get it now” mentality of a five year old and won’t wait for a device to be shipped when stores refuse to keep stock on hand?

    Can we talk about how US carriers hold the power to delay or refuse OS updates, and the fact that they have been intentionally doing so for no valid reason? We must pay special attention to Verizon for their unique build of 10.0.9 that was causing the OS to reboot and their intentional refusal to allow updates that fixed the problem to be pushed to customers in a timely manner.

    Oh yeah, we better not point out that US carriers have been sabotaging BB10 as a platform since launch. That may not help reinforce the Apple/Google duopoly that US customers are herded towards.

    Can we point out that when people have seen our own Z10 and Z30s, they did not recognize them as BlackBerry devices until told they were looking at one, and even then they had positive comments to make about them?

    Can we also mention that BB10 devices offer direct APK installation and can also pull apps from Google Play, ensuring that they come from a trusted source?

    Are you capable of acknowledging in public how writers like you write biased stories that base their complaints either on legacy devices or a year old build of an OS that nobody in their right mind would still be using to further push users away?

    Plain and simple, I’m calling you out. What’s your personal interest in seeing this company fail? Are you short? Is Apple or Samsung paying you? Because this garbage looks like you reached into a random grab bag of talking points to throw at the wall to see what sticks.

  • Just Asking

    Were you writing on your free time as per your profile?

    ” In his free time, Jeff enjoys reading and writing fiction.”