If BlackBerry is to make real waves with their new BlackBerry 10 platform, the Waterloo company will have to have some success beyond a basic upgrade cycle. In a research update to clients Byron Capital analyst Tom Astle broke down where those sales might come from. Byron Capital analyst Tom Astle attended the BlackBerry 10 launch in New York last week, and has now ditched his iPhone, at least temporarily, for the new Z-10.
Astle says he was a loyal BlackBerry user until 2010, when he made the switch to the Apple because, he says, he “really wanted a 21st century device.” But he says he always missed BlackBerry’s “messaging strength, the flashing red light and the good keyboard of the BB.” The Byron analyst says current BlackBerry users looking to upgrade will be “thrilled” with the new device. But that’s a low bar, he notes.
If BlackBerry is to make real waves with their new BlackBerry 10 platform, the Waterloo company will have to have some success beyond a basic upgrade cycle. In a research update to clients yesterday Astle broke down where those sales might come from in order from highest level of confidence to lowest. His conclusion is that there is a pretty clear path to 40-million units in 2013 (fiscal 2014).
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Astle says the low hanging fruit for BlackBerry comes from existing BlackBerry users in developed markets. He estimates that this is approximately 45% of the total 79-million subscriber base, a total addressable market of about 35 million people. He expects 40% of this segment will upgrade this year, for a total of 15-million units.
The remaining 45-million BlackBerry subscribers, says Astle, are in emerging markets. Because many of these markets are less affluent, sales will most likely come via a lower cost model, which is expected later this year. He expects just 15% of these users will upgrade in 2013, for a total of 7-million units.
The third most difficult group for BlackBerry to convert, says Astle, are former BlackBerry users who left as the technology lagged. He estimates about 26-million people have left BlackBerry since 2009, himself included. He expects that somewhere between 15%-20% of these people will return to the platform this year, for a total of 4-5 million units.
BlackBerry’s share of first time users in developed markets has slipped to just 4%, and Astle conservatively projects that the company will maintain that share this year, for a total of 4-million units shipped. This will be a key area for BlackBerry. New data suggests its brand is undergoing a resurgence in the United States.
The real growth is the smartphone space, says Astle, is in emerging markets, where some countries have a less than 50% penetration rate. BlackBerry is particularly strong in many emerging markets. But BlackBerry, he reiterates, may need a lower end model to win this business. Astle is projecting RIM will maintain its 4% global share, which translates into 12-million units.
Astle’s own modeling uses just 23-million BlackBerrys sold this year, rising to 31-million in fiscal 2015. His base case model gives him $1.60 in EPS in fiscal 2015. Astle has a BUY rating and $18 target on BlackBerry, which is about 11x his base-case fiscal 2015 EPS.
no gmail, no google maps, no push email except microsoft exchange…..
power to the people…. not
I was an android user. I had the SG3 and I dropped it for the Z10. android and ios has nothing on the Z10. Unless you have no understanding about tech you will get the Z10. I feel sorry for those closed minded fools who can not see the light that blackberry is ahead of everyone with their Brand new OS. ios is the oldest OS and it shows its age. Android is good and like I said I had a SG3 but when somehting is better it is better and blackberry 10 is the best OS on the market.
Have you looked at it? I have a Z10 and all my e-mail comes easily to my Hub. Including gmail as well as all others. Twitter, Facebook, LinkedIn, text, BBM–they all come in promptly. Google maps will come as will others.
hows that map app coming along Dom, hows that skype coming along, oh yeah still porting android 2.3 apps……..
the place to be….
and no Ann Louise there are no plans for google maps to be added.
As I could say, BlackBerry is preparing to launch an update of it android player from gingerbread to Jelly Beam (2.3.3 to 4.1). And this is a big game and message for those are thinking android is the best but when BlackBerry willl launch android runtime for jellybean, Microsoft is going to launch the skype app for blackberry10 and this is just the begin of the BlackBerry on the mobile computing market
And the Nexus 4 will soon be replaced by the Nexus 5 and the SG4 will soon be released, stop gap Z10 Still great for the BB users who managed to last this long on 2008 technology.
Sold my iPhone for $50.00 …. got the Z10 …. WOW ! This phone ROCKS. It’s no wonder why reviews are 5 stars for the work horse.
Must feel like Ted Baxter for the brain force behind this logic.
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