Hidden amongst an ever-growing portfolio of enterprise software applications is a new space BlackBerry could create some real value in, says Cormark analyst Richard Tse.
Last week, Tse attended CES in Las Vegas and managed to meet with the management of several names in his coverage universe, including BlackBerry. The analyst attended a group presentation with BlackBerry CEO John Chen and squeezed in a one-on-one with CFO James Yersh. A continuing theme in Tse’s recent coverage of BlackBery has been the potential value in the company’s pivot to software and in past pieces he has detailed the opportunity the company has in the Mobile device management/Enterprise mobility management space, and in the Internet of Things.
But a presentation at this year’s CES has Tse thinking BlackBerry could make a run at another vertical: asset tracking.
“Moving away from the above enterprise products, we believe another potential point of option value is the in the area of asset tracking,” says Tse. “Based on a presentation by BlackBerry’s President of BlackBerry Technology Solutions, Sandeep Chennakeshu, it appears there’s more movement on this initiative that was originally presented in a similar forum at last year’s CES. While it’s still early, it appears BlackBerry has been able to sign on a number of large trials with potential transportation/logistics customers for its end-to-end proprietary tracking solution that would work globally.
Tse says that while delivering on the many irons that BlackBerry now has in the fire is a very real risk, he also thinks that the value in the company’s stock means these things are free or cheap options for investors.
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“The obvious risk of course remains execution which in our view underscores why we give this name speculative risk rating, adds Tse. “That said, with improving financial results, that buys the company time to build on its product initiatives and from what we heard, it sounds like we’ll see a number of those begin to build on revenue over the coming months.”
Tse currently has a “Buy (Speculative) rating on BlackBerry and a one-year price target of (U.S.) $11.00. Shares of BlackBerry on the Nasdaq closed today down 2.53 per cent to $7.51.
According to a report from research firm Markets and Markets, the Asset Management System Market, which is populated by players such as Cisco, Motorola Solutions and Trimble Navigation is set to grow at a high rate in the years to come. The firm says driving the growth are a reduction in time for misplaced assets, cost savings and improvements in the efficiency of the supply chain.
BlackBerry could make a serious move into asset tracking, says Cormark
By
Sandeep Chennakeshu has been talking
Asset Tracking but not delivering Asset Tracking since September
2014. Where is the hardware and where are the customers?
Google {gps asset tracking} or {gps
asset tracking system} and be overwhelmed with choice. This is a
saturated mature market where hardware is at cost and monthly fees
are affordably competitive; blackberry offers nothing disruptive.
Sandeep talks of Walmart tracking its containers and the benefits
that would result – as if they don’t already do that! Walmart even
sells asset tracking systems.
An asset tracker internally needs a
GPS, sensors, a low cost processor (ARM M4 for example) and a
cellular radio; all of which are commodity parts.
Sandeep did due diligence for Prem
Watsa back when Prem made his takeover run and later the title of
Blackberry Technology Solutions was invented and handed to Sandeep.
Upper management is filled with mercenary managers paid millions per
year and John Chen is a year away from being able to cash in a
quarter of his 13M shares. Talking but not delivering could be a
management game of waiting out the clock. Prem needs a stock price of
$14 to break even while selling off his 10% stake, but convertible
debt holders only need a stock price of $10 and management is getting
paid all the way along. For some, talk is not cheap, but lucrative.
http://indianexpress.com/article/technology/tech-news-technology/blackberrys-next-big-bet-could-be-an-asset-tracking-box/
http://www.walmart.com/ip/SCYTEK-Skytrack-3000-GPS-Vehicle-Tracking-System/21607563