BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) has become a rollercoaster stock over the years — full of promise and short on delivery.
Critics often point to several factors for that volatility, such as sub-par devices not living up to expectations, a lack of focus on revenue growth, and a near-absent marketing as some of the reasons that investors lack confidence in the company.
Fortunately, BlackBerry has several initiatives underway that should address those concerns and provide some lift for investors looking at BlackBerry as an investment opportunity.
Here’s why that traditional stereotype no longer applies, and why BlackBerry is now an intriguing option to add to your portfolio.
BlackBerry is taking quality issues seriously
One of the most highly anticipated and expected moves from BlackBerry over the past year was the shuttering of the in-house hardware unit in lieu of third-party manufacturers designing and building new devices with BlackBerry’s input.
So far, those new handsets have been met with mostly positive reviews. More importantly, BlackBerry can focus on growth areas of the business, such as enterprise and IoT opportunities.
One of the long-standing criticisms of BlackBerry over the years has been quality, or, more specifically, the components used in hardware devices. From under-specified processors to lower-resolution screens, BlackBerry devices were always seen as perennial underachievers in staying current.
In a welcome change, the new third-party-built devices lack that same stereotype, and where quality issues have arisen, such as an alleged issue with KeyOne device screens, BlackBerry has moved swiftly to address concerns. BlackBerry recently noted that new and improved KeyOne devices are already trickling into retailers and carriers.
BlackBerry is prepping to re-enter lucrative markets
BlackBerry has danced around China for years. Whether it was the ongoing privacy concerns in the country or the potential for BlackBerry to be bought by a Chinese company, there’s no shortage of rumours relating to China.
Several years ago, Chen addressed the question of entering the Chinese market: “As for China, rest assured that we are developing a well-thought-out plan that will take into account many factors, including timing and our long-term strategy.”
BlackBerry doesn’t sell devices in China, despite the company’s hardware partner being based in that market. But that could be changing thanks to a couple of subtle changes in the past few weeks.
BlackBerry recently activated a Weibo account, dubbed “BlackBerryMobile.” The company also used the same name to activate a new WeChat account.
Weibo is a large social media platform in China that is integrated into a host of other services, including reservations, e-commerce, and geotagging. BlackBerry activating a Weibo account could signal a preemptive social media campaign in that market before a full sales push.
BlackBerry is investing in new areas and leveraging strengths
IoT is the latest and biggest trend in technology. Everything from automated home assistants to smart lighting and vehicles have become increasingly popular. BlackBerry is heavily invested in the IoT through its QNX platform, which powers the infotainment system in over 55 million vehicles, and its investments to elevate QNX to play a part in autonomous driving.
BlackBerry’s Radar product is a small transponder-type box is placed on trucks or containers and provides a steady stream of real-time diagnostics, including trajectory, speed, humidity, temperature, and when the cargo hold was last opened. The transponder is purchased for a fee, and then the service requires a monthly-recurring subscription payment.
BlackBerry has clearly evolved into a different company from what it was just a few short years ago, but many investors still view the company as the same manufacturer of outdated phones with small keyboards. For this reason, a small investment in BlackBerry may be warranted for long-term investors that are not swayed by short-term fluctuations.
