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Here’s Why BlackBerry's Turnaround Can Be Enticing

August 05, 2014 | About:
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kcpl

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Blackberry (BBRY) shares have picked up a remarkable 35% in the one month on the back of several positive moves. The tie in with Amazon.com (AMZN) will bolster the number of apps on Blackberry's platform, while its move into the Internet of Things, or IoT, will be an alternate growth catalyst. Besides, Blackberry reported a solid first quarter, as its losses came in lower than expected.

Going ahead, the Blackberry looks set to profit from some key trends that should fuel its spectacular growth. Let’s see why.

Enterprise business

Blackberry is making significant progress as it focuses to come back to growth and profitability. The company is focusing on enterprise business segment. The EZ pass program on Blackberry Enterprise Services is picking up prominence. More than 2,600 customers have registered with it. Blackberry has sold more than 1.2 million licenses.

Blackberry has finished six beta customer installations in Europe and North America for its BES 12 platform and has six additionally lined up to start in July. There's positive customer feedback for its features, usefulness and stability.

Smartphone strategy

Blackberry successfully launched the Z3 smartphone in Indonesia last month. The gadget saw substantial sales on the launch day as the company aggressively advertised the same through television ads. The first-day sales ended up being the strongest among recent Blackberry 10 launches and were sold out on the first day in Indonesia. This signifies that the Blackberry brand is still strong in the nation. Additionally, request in Indonesia is robust as the company ran out of stock several times.

To tap the success of this smartphone, Blackberry launched Z3 in Vietnam also and plans the same for countries such as India, where the gadget sees strong support and customer interest. So, the company is making the best move by addressing developing markets where its phones are in demand.

Also, Blackberry as of late tied up with Amazon for apps on Blackberry 10.3. This is expected to add more than 240,000 Android apps on the platform, including mainstream consumer apps.

Going ahead, Blackberry is moving ahead with secure enterprise-class applications while leaving the application part to Amazon. The partnership also addresses the key issue of customers not embracing the Blackberry 10 devices because of an expensive app ecosystem.

Besides, Blackberry plans to proceed with the launch of a new gadget called Passport in September in London. This device is Blackberry’s attempt at garnering market share in the phablet market which is also growing at rapid clip.

Other product releases anticipated in 2015 include BBM for Windows in July, the release of BES12 in November, and QNX cloud in December. So the organization seems to have a solid smartphone strategy that should address erstwhile Blackberry loyalists furthermore and address the needs of customers in the developing markets.

Focus on the cloud and the Internet of Things

Blackberry is right now living up to expectations with Nanthealth, which provides a cloud-based smart health-care resource platform used to unite physicians, patients, customers, researchers and clinical labs. With such a move, the organization is transforming itself into a cloud and Internet of Things player.

Blackberry, as of late, acquired Project Ion for addressing the Internet of Things market space. It involves a secure open cloud platform controlled by the QNX, as well as the Blackberry Secure Enterprise Mobility Management. This venture is also focusing on building a robust ecosystem of carriers and application partners.

Presently, the Internet of Things has a tremendous potential going forward. As indicated by IDC, there will be 212 billion connected things by 2020, making the Internet of Things a $8.9 trillion business.

Blackberry's focus on machine-to-machine network and the Internet of Things is a smart move, and the organization should pick up strongly from the growth of this idea going ahead.

Conclusion

Blackberry is still running in losses, yet the company is most likely making the right moves. Indeed, analysts are also indicating a recovery in Blackberry's fortunes. In the next five years, the organization's bottom line is expected to grow at a CAGR of 18.5%, which is a spectacular change over a yearly loss rate of 19% in the last five years. Also, its balance sheet is strong as Blackberry has cash hoard of $2.68 billion, which is twofold of its obligation figure of $1.34 billion.

The organization has picked up some consistency and has beaten analyst estimates comprehensively in the last two-quarters. Investigating the moves that it is making and the strategies that it is embracing, Blackberry should have the capacity to sustain its solid run going ahead.


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