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A new phone isn’t saving BlackBerry, this investor says

BlackBerry

BlackBerry invest A new 5G enabled BlackBerry (BlackBerry Stock Quote, Chart, News TSX:BB) smartphone is set to hit store shelves in 2021, but for those investors imagining a share price surge based on the iconic phone with the keyboard, think again, says Scotia Wealth fund manager Cole Kachur, who says there are plenty of better tech options out there.

BlackBerry officially got out of the smartphone-making business four years ago through a deal with Chinese communications company TCL, which was making Android phones under the BlackBerry name.

That contract is now over but BlackBerry recently announced a new partner in US company OnwardMobility, who will deliver a 5G phone for the market next year.

"Enterprise professionals are eager for secure 5G devices that enable productivity, without sacrificing the user experience,” said OnwardMobility CEO Peter Franklin in an August 19 press release.” BlackBerry smartphones are known for protecting communications, privacy, and data. This is an incredible opportunity for OnwardMobility to bring next-generation 5G devices to market with the backing of BlackBerry and FIH Mobile.”

BlackBerry

But the 5G smartphone landscape is quickly getting crowded, and investors hoping for a return of BlackBerry handset to anything like a competitive position in the smartphone racket are likely to be disappointed, says Kachur.

“The handset is interesting but how many people at this point are going to go back to that? I don't think it’s as many as one might think. The iPhone and Google and all these other devices are pretty competitive in that front,” says Kachur, speaking on BNN Bloomberg on Wednesday.

“So then you just look at the company and for a long time it was software specifically for vehicles and that type of thing, [but] I just think there are so many other technology companies out there that are better,” Kachur said. “Every time you invest in something there's an opportunity cost of not investing in something else. So I think that, in my opinion, I would just move on from Blackberry and look at some of these cloud companies in the US and other tech companies.”

“I think you'll find a better spot for your money,” Kachur argued.

BlackBerry’s share price has pretty well climbed back to where it was 12 months ago but the stock has certainly seen better days, even in the recent past. BB hit a high of C$18.00 back in early 2018 but it’s been on a notable slide ever since and now lives in the C$6.00 to C$7.00 range.

BlackBerry’s reemergence as a software and security company has seemingly stalled, with the company seeing COVID-hampered revenue in recent quarters, where its connected tech for the automotive sector has taken a hit. For its most recent quarter, delivered in June, BlackBerry’s revenue fell by 17 per cent year-over-year and by 27 per cent sequentially, while the company took a net loss of $636 million or $1.14 per share. (All figures in US dollars except where noted otherwise.)

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.

Comment

  1. First of all this fund manay has no idea what the phone will look like. Secondly, this phone is probably a non issue. Just a add on. Blackberry is a software company. This fund manager is clueless

    However, Jayson, what you should be covering is blatant corruption at BlackBerry between Watsa and Chen. And how they are scratching each other’s back. How Chen has lied to investors. You want to do a full expose on the mafia like relationships at BlackBerry?

  2. The analysis and comments about a BlackBerry branded phone being a savior to the company of days gone by is not well founded. Long-term investors of the company are well aware that ship has passed.

    To continuously revisit the discussion of iOS, Android and BB10 as a battleground was put to rest a long time ago. BlackBerry formally exited the manufacturing of handsets business and walked away from the BB10 OS. There are zero expectations any BlackBerry handset sold would be anything more than licensing revenue of the BlackBerry name on a device. Nothing more, nothing less. The handsets are also viewed as an opportunity to place some of their working software on devices in the market.

    For the Company, if they were astute in their planning & strategy, it would be an opportunity to modify the open source Android OS to align with some of the fundamental strengths the BB10 OS.

    Suffice to say, BlackBerry would be better served to return the company to its former glory by:

    1) Returning to the company’s roots and name “Research In Motion”.
    2) Redefining the vision that technology is versatile and mobile. It is not rooted in the devices of the day (the fad) but the technology of the future that will move people to do more in a cognitive, safe, efficient and effective way
    3) Is not bounded by the current realm of possibilities but the vision of tomorrow. Cognitive technology should make all handheld devices irrelevant in tomorrow’s world.

    The growth opportunity for RIM will be the research areas where no one else is thinking today. The valuation of the company boils down to the engineers and Think Tanks the company currently employs, can retain or attract from Universities and Colleges to innovate and create. Without true innovation, the company will remain perpetually a penny stock.

    This is the concern with BlackBerry. It has been stagnating and stretching for too long. Innovation takes time and money but funding will eventually run dry without some solid innovation to show for the investment. The money will follow those that have more substantial indicators to tomorrow.

  3. Just came across this, it seems that this topic is just way off and missing the point. BlackBerry has announced that they are out of the handset/smartphone business. Now they’re just licensing the BlackBerry name. This article seems to be just beating the dead horse, its more of an emotional writing that anything, point is way off.

    For the past years BlackBerry has been so focused on SW for Cars and Enterprise Security for Government and Corporations. Majority of the people hardly knows what other businesses BlackBerry is involved in.

    Even people that hate BlackBerry may not realize that their cars could have a BlackBerry QNX SW in it. Just for the sake of mentioning it… Here are the cars… Audi, BMW, Ford, GM, Honda, Hyundai, Jaguar Land Rover, KIA, Maserati, Mercedes-Benz, Porsche, Toyota, and Volkswagen.

    Yes it’s very difficult for people to understand and accept that BlackBerry has other businesses.

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