A Comeback for Blackberry?

Posted on Apr 07, 2014
By Gaurav Aidasani

Wall Street had a sweet surprise when Blackberry was seen beating the already admittedly low-end estimates for its fourth quarter. Blackberry’s numbers looked pretty gloomy. However, the situation wasn’t that bad. In fact, the company’s stock has risen about 24% over last three months, as some investors have been sold on to a comeback tale.

This leaves us wondering, does Blackberry have a shot?

Blackberry’s CEO, John Chen has given a 50% chance to the company to make a comeback. Some investors think those are good odds with Chen at the helm.

"He's definitely smarter and better than the previous management, and he's got a good track record," Genovese said.

BlackBerry's messaging service, has 85 million monthly active users versus 450 million for WhatsApp. Facebook’s $19 billion acquisition of Whatsapp has also made it likely to buoy the stock.

So far, the company has been cutting costs to make Blackberry a leaner option. Chen has also made a deal with Foxconn to manufacture BlackBerry devices. BMM has a devoted following in the Asian and Latin American marketers, so, the plan is to produce cheap devices and hit these markets.

BlackBerry isn't abandoning the North American market, though: Chen said he's planning to have BlackBerry design high-end phones, and then produce them with a yet-unnamed manufacturer.

However, now, the company is pulling heavily from the past. Chen has outlined the plans to pump up the production and sales of Blackberry Bold. Even the company's new concept phone, the Foxconn-produced Q20, appears to be embracing legacy technology — in this case a physical keyboard and trackpad instead of a touchscreen.

Genovese doesn't think the plan will work. "Chen's done a good job controlling what he can," Genovese said. "My analysis would be he's got a year."

Telecom expert Roger Entner of consulting firm Recon Analytics, was similarly skeptical.

Ted Schadler, an analyst with Forrester Research, dismisses such talk. "It's a big world," Schadler said. "It's not a winner-take-all market. There's a good chance they'll be around." Even app development isn't that big of a deal. Developers may not be flocking to the BlackBerry platform, but most Android apps can be easily ported to the OS, he said.

Analysts think that Chen has been making all the correct decisions and the leading Blackberry on the right track. To add to it, the company has enough cash on hand to ensure that the company bounces back.

However, in the end, it’s the customers who will decide the fate of this company. Are you ready to give Blackberry a second chance?