The Motley Fool

What Does the New Classic Phone Mean for BlackBerry Ltd. and its Stock Price?

On Wednesday, BlackBerry Ltd. (TSX: BB)(Nasdaq: BBRY) CEO John Chen penned an open letter on the company’s official blog, outlining his thoughts behind the BlackBerry Classic. And there was a pretty common theme to his message, summed up by one line in particular: “if it ain’t broke, don’t fix it.”

Mr. Chen is certainly backing up his words with the Classic, which has many of the features BlackBerry fans have come to love, including the QWERTY keyboard, trackpad, and navigation keys. It’s essentially an upgrade to the BlackBerry Bold, but this time it comes with a bigger screen, updated look, and the latest BlackBerry 10 operating system.

This is a great sign. Over the years, BlackBerry had gotten away from these types of phones in an attempt to keep up with the likes of Apple and Google. In response, many customers were holding onto their Bold devices because, as Mr. Chen put it, “they get the job done, day in and day out – just like you.”

So will the Classic help reinvigorate BlackBerry? And if so, will it be enough?

A continuation of the strategy

Mr. Chen also acknowledged that some of BlackBerry’s newest devices, such as the Passport — a phablet device with a 4.5-inch square screen — “break the mold,” while the Classic is an attempt to get back to what works. But the Passport and Classic have more in common than Mr. Chen is acknowledging, because both signify a continuing shift toward the enterprise market.

So far, this shift has worked out very well for BlackBerry (as well as its stock price). So shareholders should probably appreciate the Classic phone, even if they won’t rush out to buy it.

Still some major headwinds

That being said, this phone is not going to save BlackBerry. Remember, the company is fighting a very powerful trend, one that sees workers bringing their own devices to the office. This trend, often referred to by its acronym, BYOD, has grown very quickly in recent years, mainly because security concerns have been fading.

BYOD may be the biggest obstacle for the new Classic phones. Much of the BlackBerry Bold sales came from companies issuing them to employees. Now BlackBerry must appeal to those employees directly. And one must also remember that few people like carrying around two phones. So BlackBerry must convince everyday people that the Classic is a better all-around phone than the iPhone. That’s not an easy task.

So what should you do?

At this point, it’s still too early to gauge whether Mr. Chen’s strategy will pay off in the end. But he is in it “for the long haul,” and results so far have been good. So BlackBerry likely deserves a place in most portfolios.

If you decide to make it part of yours, you may want to balance out that risk with a company that has a more predictable future than BlackBerry. One to consider is The Motley Fool’s top pick for 2014, which is revealed in the free report below.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair has no position in any stocks mentioned. David Gardner owns shares of Apple, Google (A shares), and Google (C shares). Tom Gardner owns shares of Google (A shares) and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares).

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.