BlackBerry Ltd (BBRY) Smartphone Battle May Be Over

BlackBerry Ltd (BBRY) Smartphone Battle May Be Over
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares have gained more than 50% over the past three months. John Chen has come up with a turnaround plan that struck a cord with investor sentiment. BlackBerry entered a five-year agreement with Foxconn Technology Co., Ltd. (TPE:2354) to manufacture low-end smartphones starting April 2014. But Kofi Bofah of Onyx Investments says that almost nothing has changed except constant drumbeats of asset sales, layoffs and convertible bonds diluting shareholder value. Last month, Fairfax Financial Holdings exercised the option to purchase additional $250 million of debentures.

Microsoft threatens BlackBerry’s smartphone aspirations

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s BB10 OS was recently named among the biggest flops of 2013. The company still has a good position in emerging markets. But its upcoming smartphone codenamed “Jakarta” may be too little, too late. Currently, the iOS and Android duopoly has an iron grip on the smartphone OS market, and Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930) sells about 33% of global smartphones.

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Meanwhile, Microsoft Corporation (NASDAQ:MSFT) has almost completed its acquisition of Nokia Corporation’s handset business. It indicates the emergence of a third player in the fiercely competitive smartphone market, at the expense of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). The Redmond-based software giant generates about $30 billion in annual free cash flow from operations. Its Xbox, which was a laggard a few years ago, has emerged as a big challenger to the PlayStation 4. It shows that Microsoft is willing to throw cash at any business where it aims to strengthen its position. According to CounterPoint, Nokia Asha 501 was the tenth best-selling mobile phone in October worldwide.

BlackBerry could be too late in emerging markets

Talking about emerging markets, Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) has purchased Motorola from Google Inc (NASDAQ:GOOG) for $2.91 billion. The Chinese company already has a solid presence in its domestic market. And it aims to penetrate into other countries with the help of Motorola. The massive success of Moto G in India shows that the Motorola brand can still charm customers in emerging markets.

In the U.S., the BB10 platform is used by a mere 3.5% of subscribers, according to comScore. The iOS-Android duopoly jumped slightly to control 93.1% of the U.S. market share. Changing equations suggest that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) could be left far behind by Microsoft Corporation (NASDAQ:MSFT) and Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992)

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares were up 1.27% to $9.95 at 11:14 AM EST.

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Vikas Shukla has a strong interest in business, finance, and technology. He writes regularly on these topics. - He can be contacted by email at
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  1. I had iPhone for 3 years, now have Z30, by far the BB z30 out preforms the apple product, I was terrified to switch to the BB only because of the uncertainty of the business. BB has been doing updates to the Z30 as new service become available,

    By far the BlackBerry z30 is the best product out there , and it’s the OS, very easy to use, fast browser, now all ANDROID apps are available to BB phones, Cool, it turned out to be a great decision, (love the connectivity to local network and media devises in home)

  2. being truthful is not being hateful, I offered to help Blackberry at the time Thorsten was put in power. its Blackberry that ignored my plea, if anyone is doing the hating around here its Blackberry.

  3. No body or no one stays at the top all the time. Just like when Blackberry ruled for 10 plus years a new breed has come along. Blackberry will rise because the BB10 operating system is far superior than that of Android and Apple( only good for playing games). It is only a matter of time. Just wait and see.

  4. It seems like every thing that Blackberry does is to little to late. People in the US think that the USA is the world. Blackberry is thriving in other parts of the world. There will be back lash against Google and Apple around the world. It has already begun. Countries are realizing that Google and Apple don’t pay their fair of taxes in those countries, so government will make it harder for them to operate there.

  5. IF Foxconn launches a product that resembles what is already in the marketplace it will flop. And I know that is exactly what Foxconn will do.

  6. How can you say that Pjews nothing has changed Chen is operating exactly as Thorsten would. last year when Thorsten was in power you said the same thing about him?? The only thing that is different is that Chen gave up on the handset bus and gave it away for free to Foxconn. The way I see it, if Foxconn is taking all the risks in potential write offs and taking full responsibilities pertaining to manufacture and marketing, you can bet your booties that they will be taking all the profits also. Thus leaving nothing for shareholders,

  7. I am taking this article, with a grain of salt. Blackberry might not be the powerhouse they use to be, but the company is far from dead. It now for the first time in history have very good management team.
    The current team is a very good combination of experience veterans in mobile communication. The coming quarters will show a big improvement in Blackberry’s status in mobile management and communication.

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