BlackBerry’s On a High. Can It Keep Going Up?

It’s been a wonderful week for BlackBerry (TSX:BB)(Nasdaq:BBRY), filled with positive headlines. Ford replaced Microsoft Windows with BlackBerry’s QNX system for its in-vehicle technology. Facebook bought WhatsApp for $19 billion, implying a potentially large value for BlackBerry Messenger (BBM). And investors have embraced CEO John Chen’s latest strategic moves, such as the return of the function key “belt”.

The Canadian technology giant has seen its shares increase by about 20% since the beginning of last week. Thus it seemed like perfect timing for BlackBerry to unveil its latest phones.

The Z3

First up was the Z3, a low-cost model set for an April release in Indonesia. The Z3 will retail for $200 without subsidies and will initially only be available on 3G networks. Mr. Chen said that a faster phone with 4G connectivity will become available in other markets “sometime in the future before I die.”

The Z3 is the first phone to be made under BlackBerry’s partnership with Foxconn. It is a 5-inch device that runs the latest version of BlackBerry 10, and will be touch-screen only. Perhaps most importantly, the phone improves compatibility with Android apps, while still coming with a long-lasting battery.

Doing a soft launch (which involves releasing the product in a limited market initially) is probably the right call for BlackBerry’s latest low-cost phone. The strategy allows the company to work out any product quality issues before a release in larger markets. And BlackBerry remains very popular in Indonesia, which ideally will allow the Z3 to generate plenty of momentum after
its release.

The Q20

The other new phone represents much more of a return to BlackBerry’s roots. The Q20 will feature the traditional QWERTY keyboard, as well as the function key “belt” (and the Integrated Trackpad) that is so popular with BlackBerry’s enterprise customers. The phone also features a 3.5 inch screen, the largest ever for a BlackBerry phone with the QWERTY keyboard. And like all other BlackBerry phones, the company is once again promising a very long battery life.

The Q20 will be available in the second half of this year.

Foolish bottom line

Of course these two phones alone will not be enough to turn BlackBerry around. But it is a sign that John Chen understands what it takes to appeal to the company’s most important target markets. Investors are clearly more hopeful than they have been in a long time, as well they should be.