Things are slowly starting to turn around for BlackBerry Ltd. (TSX: BB)(NASDAQ: BRRY). The company is focusing on its core customers by releasing new mobile phones that cater to that niche. Power users want these phones. And BlackBerry is the only one providing them.
On top of that, it’s close to monetizing its BBM platform, which will generate much-needed revenue. While it may never compete with the biggest phone makers, I think it has a place in this world and will make profits for investors. Here are two reasons you should consider joining the BlackBerry revival.
1. BlackBerry is looking to its core
BlackBerry makes great devices for executives, bankers, accountants, and anyone else who needs the ability to do a lot of things on their device at the same time. BlackBerry is starting to roll out products that cater to that market.
The Passport is a really wide device that can handle spreadsheets really easily. Every single CFO should have one, along with all of the finance departments in big corporations. The reason these users would want the Passport is for ease of transportation. Why carry a phone and a tablet when one device is enough? And now BlackBerry is releasing the Classic, which is pretty similar to its old Bold device.
During the question-and-answer portion of the first-quarter 2015 earnings call, CEO John Chen said, “if we ship 10 million phones in a year, we’ll be profitable on phones. That’s the model we’re going after.” When the Passport first went on sale, the 200,000 units that were available were sold out in 10 hours. Granted, that 200,000 is nowhere near 10 million, but what this shows is that there is significant demand for these devices. In Q1 2015, the company shipped 2.6 million devices. In Q2 2015, the company shipped 2.1 million devices. Now we’re coming upon the holiday season, and with these two new phones out, I anticipate it will be a strong quarter for phone sales.
2. BBM is slated to start generating revenue
BlackBerry has been getting serious about BBM ever since messaging service Whatsapp was acquired for nearly $20 billion. It’s rolling out a lot of new features and pushing users across the many different OS platforms to try the messaging app out.
One of the features that I think many people will like is the message redaction tool. This will allow a user to delete a message from the entire BBM trail. Here’s a use case: User A sends a message to User B. User A then decides she doesn’t want that message seen, so she redacts it. This removes the message from User B’s screen as well as User A’s screen. This competes with companies like Snapchat.
But finally, BlackBerry is going to be rolling out ads on BBM that will allow it to generate revenue. If BlackBerry can make the ads targeted, it will be able to charge advertisers more.
Then there’s the fact that the company is looking at targeting premium users to pay for an advanced BBM. This would include more security, even more features than BBM, and would carry with it a fee for use. Whatsapp charges $1 per year. I believe BlackBerry could charge a couple dollars a month to these premium users due to the increased security.
Is it time to buy?
There’s no doubt that BlackBerry is currently at a crossroads. Since bringing on John Chen as CEO, the company has made a lot of smart moves. I believe the company is going to start generating more revenue from its hardware department as well as from BBM. Because of these two reasons, I suggest acquiring shares of BlackBerry.
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.
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 Jacob Donnelly has no position in any stocks mentioned.