1. propeller10's Avatar
    Source - CNN Money : BlackBerry: Not dead yet! Seriously. - The Buzz - Investment and Stock Market News

    BlackBerry: Not dead yet! Seriously
    By Paul R. La Monica December 10, 2013: 1:15 PM ET
    Shares of BlackBerry have plunged this year. It's as if investors expect the company to die. But don't bury BBRY yet.

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    BlackBerry, the smartphone maker formerly known as (Prince?) Research in Motion, is having a terrible 2013.

    Okay. I'm sugarcoating the situation by merely referring to this year as terrible. It's been horrific. Deplorable. Ghastly. Apocalyptic even.

    Shares of BlackBerry (BBRY) are down more than 50% this year. They fell 4% Tuesday and hit their lowest level since September 2003 in the process.


    You probably know the BlackBerry story by now. But here are the highlights (or shall I say lowlights?) of the year.

    BlackBerry finally launched its Z10 touchscreen smartphone in January. The phone ran on the company's long-delayed new BlackBerry 10 operating systems. Sales were not particularly good. Once again, a massive understatement.

    Consumers had moved on from QWERTY keyboard phones that were great for e-mailing (but not much else) to fancier, PCs in a pocket such as Apple's (AAPL) iPhone and devices running on the Google (GOOG) Android operating system -- most notably Samsung's Galaxy.

    Heck, even Microsoft (MSFT) and Nokia did a better job of catering to the shifting tides in the mobile landscape with the Lumia brand of phones that run on Mister Softee's Windows Phone OS.

    Related: Another bleak day for BlackBerry

    Due to the poor Z10 sales, BlackBerry was forced to take a nearly $1 billion writedown to reflect for the cost of unsold inventory. The company also announced plans to cut 4,500 job s in September.

    There were some brief hopes this fall that BlackBerry would be saved by its largest shareholder -- investing and insurance firm Fairfax Financial. Fairfax's founder Prem Watsa has often been described as Canada's Warren Buffett.

    But Watsa's plan to take the company private collapsed after no other firms were willing to actually buy BlackBerry.

    Last month, the company abandoned its plan to review any strategic alternatives, ousted CEO Thorsten Heins after a brief tenure that began in January 2012, and is now focusing on the so-called "prosumer" market of professional consumers that actually may still prefer BlackBerry phones to those running on iOS, Android or Windows.

    Whew.

    Now with BlackBerry stock trading at its lowest point in more than a decade, it's tempting to declare that the company may not survive for much longer. After all, analysts expect the company's sales to continue plunging in 2014 and that BlackBerry will keep bleeding red ink.

    Related: Where Thorsten Heins went wrong

    Yet here's the thing. I honestly believe that BlackBerry's stock may finally have bottomed. Don't laugh. Okay. You can chuckle a little. But hear me out.

    Investors appear to be pricing in the imminent demise of BlackBerry. That seems premature. The company had $2.6 billion in cash as of the end of August.

    Yes, that's down from $3.1 billion a quarter earlier. But even if BlackBerry ran through $500 million in cash a quarter for the foreseeable future, it has enough cash to get it through early 2015. And that $2.6 billion figure doesn't include a $1 billion investment it got from Fairfax in early November.

    BlackBerry will release its next quarterly results (can't call them earnings, I am afraid) on December 20. So we'll soon get more clarity about the company's balance sheet.

    But the biggest thing I think investors are missing with regards to BlackBerry (at least from a stock perspective) is that it won't take much for shares to rebound.

    Expectations are for the company to continue its slow fade into tech obsolescence. With that in mind, the company should be able to easily ooze over Wall Street's low bar. And if that happens, the company could go from dog of 2013 to hero of 2014.

    Just look at how two of this year's biggest winners on Wall Street have turned their fortunes around after a brutal 2012.

    Best Buy 's (BBY) stock is up 250%. Hewlett-Packard (HPQ) has gained 90%. Neither company is financially healthy per se. Sales for both are expected to be merely flat in their next fiscal year compared to this year.

    But they are less worse off now than they were a year ago. And that's in large part due to new-ish management teams taking a cold, hard look at the companies and making changes to get them on the right track.

    In the case of Best Buy, CEO Hubert Joly and CFO Sharon McCollam deserve a huge amount of praise for making Best Buy more competitive with the likes of Wal-Mart (WMT) and Amazon (AMZN) again. Best Buy's revamped web site is really helping.

    And HP CEO Meg Whitman, the former chief of eBay (EBAY) , is saying all the right things about how it's going to take HP a long time to completely turn its fortunes around.

    Related: HP stock pops on better-than-expected earnings

    She's also been wise enough to focus more on organic growth in software and services as opposed to doing more deals. After all, it was the acquisitive sins of Whitman's predecessors (Carly Fiorina, Mark Hurd and Leo Apotheker) that made HP such a bloated mess in the first place. (Hopefully she doesn't now prove me wrong by going out and overpaying for a 3-D printer maker.)

    And guess what? BlackBerry has a new leader too. John Chen is the interim CEO. And if there's anyone that can turn the company around, Chen seems like the right person.

    For one, he's not a RIMM/BlackBerry lifer. He will be less emotionally wedded to the company's legacy and more likely to make rational decisions about how the company needs to change its ways in order to survive -- such as possibly ditching devices and focusing more on software and patents.

    Plus, Chen has already been the architect of a miraculous tech turnaround. He took Sybase, a struggling database software developer, and made it into a mobile powerhouse. Chen became CEO of Sybase in 1998, returned the company to profitability in a few years and ultimately wound up selling the company to SAP (SAP) in 2010 for nearly $6 billion.

    Related: Corporate daredevil John Chen might just turn BlackBerry around

    Now, I know what you're thinking. Chen doesn't have a dozen years to turn around BlackBerry. But all Chen has to do is talk a good game and stem the bleeding. If he does that, the enterprise and government customers that have yet to abandon BlackBerry will likely stick around.

    And if Chen can find a way to make more money from existing customers as opposed to worrying about grabbing market share from Apple and Google, then the stock could easily bounce back.

    Don't get me wrong. BlackBerry will never be dominant again. But it doesn't have to be for investors buying the stock now to be rewarded. All the company has to do is prove that the rumors of its death are greatly exaggerated. Chen should be able to accomplish that.
    Last edited by elite1; 12-10-13 at 02:55 PM.
    12-10-13 02:11 PM
  2. just_luc's Avatar
    Good, honest, article.

    Nice find.
    12-10-13 02:17 PM
  3. njblackberry's Avatar
    The one paragraph that will strike fear into the hearts of the loyalists:

    For one, he's not a RIMM/BlackBerry lifer. He will be less emotionally wedded to the company's legacy and more likely to make rational decisions about how the company needs to change its ways in order to survive -- such as possibly ditching devices and focusing more on software and patents.
    12-10-13 02:19 PM
  4. just_luc's Avatar
    The one paragraph that will strike fear into the hearts of the loyalists:
    One man's opinion.. Chen has been very clear that devices are an important part of the company's future. Anyone refusing to see that is doing just that.
    12-10-13 02:21 PM
  5. njblackberry's Avatar
    Uh huh.
    Guess we will hear more in 10 days.
    JeepBB likes this.
    12-10-13 02:23 PM
  6. ccbs's Avatar
    The one paragraph that will strike fear into the hearts of the loyalists:
    I think that is the whole point of having an outsider to lead them. Another good step is to move the headquarter to bay area here and get close to the right talent and instill new thinking. It might also help mitigate those 'perceived' American conspiracy and media bias.
    12-10-13 02:32 PM
  7. alan510's Avatar
    I don't think you'll see BlackBerry relocate. I understand the reasoning but beyond the nationalistic take that it won't move because it's Canadian, it's not practical to relocate to Silicon Valley. Too many people to move; not enough money to move them.

    Posted via CB10
    just_luc likes this.
    12-10-13 02:41 PM
  8. playbookster's Avatar
    The one paragraph that will strike fear into the hearts of the loyalists:
    Yeah I'm fearful. Lol

    Sent from my Z30
    12-10-13 02:55 PM
  9. SirJes's Avatar
    Yeah I'm fearful. Lol

    Sent from my Z30
    So am i....

    CLICK HERE To Join My Music & Poetry Channel. Please&Thanks.
    12-10-13 02:57 PM
  10. Elite1's Avatar
    Uh huh.
    Guess we will hear more in 10 days.
    In 10 days, we'll hear some very dismal financial results. (Sorry if I ruined the surprise for anyone.)

    Everyone expects that.
    Savior4Life and just_luc like this.
    12-10-13 03:00 PM
  11. anon1727506's Avatar
    Now, I know what you're thinking. Chen doesn't have a dozen years to turn around BlackBerry. But all Chen has to do is talk a good game and stem the bleeding. If he does that, the enterprise and government customers that have yet to abandon BlackBerry will likely stick around.

    And if Chen can find a way to make more money from existing customers as opposed to worrying about grabbing market share from Apple and Google, then the stock could easily bounce back.

    Don't get me wrong. BlackBerry will never be dominant again. But it doesn't have to be for investors buying the stock now to be rewarded. All the company has to do is prove that the rumors of its death are greatly exaggerated. Chen should be able to accomplish that.
    Not sure that anyone is going to buy TALK from anyone with a BlackBerry position on their business card. The first CEO turn around got that benefit of the doubt, this one is going to have to prove he has a viable plan to make BlackBerry profitable.

    Not sure existing customers are going to bleed much more for the "cause". The enterprise market is being saturated with other choices - hardware and software, pricing is going to be difficult to come close to what BlackBerry was able to ask back when they were the only player. And even if they could get a 1 for 1 pickup from BBOS to BB10, that is a net loss for the company as BB10 devices don't carry the Service Fees. So unless the majority of existing customers are on BES - and I don't think they are. Other than BBM being monetized pretty quickly I don't see existing customers bring much more to the table.
    Savior4Life and JeepBB like this.
    12-10-13 03:13 PM
  12. siddharth's Avatar
    Good article, great read.

    1. Clever and smart marketing stressing in security and gesture ui and BBM features can probably change the fortunes of Bbry.

    2. Off course smart pricing of the devices.

    3. Hiring brand ambassadors like JB to make it more appealing to kids and girls.

    4. Getting all the mainstream apps like instagram, viber officially on board BBW.

    5. Corporates selling using security and byod systems.

    Hoping the best for BBRY's future.

    Posted via Black ZeD on 10.2.1.1055
    12-10-13 03:23 PM
  13. GTiLeo's Avatar
    truth but this will fall on deaf ears
    12-10-13 04:20 PM
  14. Unbiased Tech's Avatar
    Great, honest article. Hopefully better decisions are made in the short-mid term so that things will be beneficial in the long run. Its time to shake some things up, and if that means some sacrifices I'm all for it.
    12-10-13 04:25 PM
  15. GTiLeo's Avatar
    In 10 days, we'll hear some very dismal financial results. (Sorry if I ruined the surprise for anyone.)

    Everyone expects that.
    you're probably right, but my guess is they won't be nearly as bad as the last earnings report, most of the manufacturing fees should have been paid out and manufacturing should have stopped to sell off the surplus of devices.

    i only see operating costs and maybe some small manufacturing costs for the company and hopefully they made enough service revenues to keep the expenses to a minimum.

    if i had to guess a loss of around $100 million but i hope i'm wrong and they push it closer to break even, though its not likely
    12-10-13 04:25 PM
  16. njblackberry's Avatar
    I think there will be significant Q10 and lesser Q5 writedowns. Unless the truly knew that the Z10 was a dud, they didn't cut back manufacturing on the keyboard BB10 devices that everyone supposedly wanted.

    I think it will be really bad.
    JeepBB likes this.
    12-10-13 04:32 PM
  17. Thunderbuck's Avatar
    The one paragraph that will strike fear into the hearts of the loyalists:
    Well, they need someone who can look at the big picture, and to me (ESPECIALLY as an investor), that's more important.

    Worth remembering, though, that BBRY had plenty of opportunity to break up and liquidate for parts, and chose the harder road of trying to maintain the business. I would assume Chen would have had to commit to supporting that before he was hired as "interim" CEO. As far as that goes, the "interim" part of his title might be there to help ensure he doesn't deviate from that. Presumably, once they trust Chen the "Pinocchio" CEO will become a real boy...
    12-10-13 04:35 PM
  18. njblackberry's Avatar
    Again, we will hear more in 10 days. What they have isn't working particularly well now.

    So saying they are going to stay the course and "improve execution" or some other pablum isn't going to fly. The Big Picture may involve some massive restructuring. And something Bold - get it, BOLD
    JeepBB likes this.
    12-10-13 04:44 PM
  19. thisiscjay's Avatar
    I don't think you'll see BlackBerry relocate. I understand the reasoning but beyond the nationalistic take that it won't move because it's Canadian, it's not practical to relocate to Silicon Valley. Too many people to move; not enough money to move them.

    Posted via CB10
    I thought a move of HQ to Toronto would be a good idea
    12-10-13 05:13 PM
  20. c_legaspi's Avatar
    How about in critical condition or on life support

    Posted via CB10
    12-10-13 10:43 PM

Similar Threads

  1. BlackBerry World Videos
    By mphillips828 in forum General BlackBerry Discussion
    Replies: 3
    Last Post: 12-13-13, 03:59 PM
  2. Blackberry Link Can't Communicate with Blackberry Z30
    By Bethany Moore in forum BlackBerry Z30
    Replies: 9
    Last Post: 12-10-13, 06:06 PM
  3. Replies: 2
    Last Post: 12-10-13, 04:54 PM
  4. WTS: US Cellular BlackBerry 9850. In Great Shape!
    By trsbbs in forum The Marketplace - Buy, Sell & Trade
    Replies: 1
    Last Post: 12-10-13, 01:36 PM
LINK TO POST COPIED TO CLIPBOARD