Last year, most of us thought that Blackberry had flatlined, but it appears that the company is coming back to life (sort of). Its stock price recently jumped 9.7% after reporting 1st quarter earnings. Why? The adjusted loss for the quarter was about 1/2 of the expected results, demonstrating moderate stability.
Is this a sign of a legitimate turnaround? Sort of. Blackberry has been able to improve the company’s bottom line via cost cutting, not growth.
“We’re a viable company, and we’re starting to focus on growth,” says John Chen CEO, who took over the floundering company late last year. The company’s revenue goal? $100M by 2016. In order to reach this goal (or simply return to profitability), Blackberry will need to be different from other smart phones on the market.
Chen, who would like to see the company’s hardware business rebound, notes that smartphone sales will hinge on growth potential. Fortunately, Chen has a strong plan B. In the near future, he wants to take steps to turn Blackberry into a software and services company.
How will Blackberry make money? Chen plans to monetize BBM, Blackberry’s secure messaging system, and will target health care, finance, and government users.
In addition, Blackberry recently partnered with Amazon’s APP store, as a way to enhance the selection of mobile apps.
Chen also debuted a new, square-ish shaped smartphone, called “Passport” (4.5′) at the recent shareholders meeting, creating a new market for smartphones, called “Phablets” — a cross between a tablet and a phone. This product will be available in Europe and the US in September.
When it comes to smartphone competition, most will agree that Blackberry has its work work cut out for it. After 5 years of development, Amazon just came out with a new smartphone, the Amazon Fire. Cost: $200 for a 2 year contract. It’s not necessarily “smarter” than an iPhone or Android, but they seem to be targeting Amazon “power users”, a fast-growing segment of the market.
Consider Blackberry to be in the recovery phase. Its future is still uncertain, but seems to be out of the woods. For now.