Can BlackBerry Recover From The Slump
The smartphone maker can be on the track of recovery if it suspends its hardware business.
BlackBerry stock has seen the massive decline of around 21% in the current year and the company’s hardware business reached its final stage. CEO John Chen has shifted his focus on the software and the services in order to prevent the business from sinking.
The CEO has not lost all the hopes for its hardware business as well. Last November, the company launched its first ever Alphabet Inc.’s Google’s Android powered smartphones, dubbed as PRIV. The Canadian company was optimistic about the device in bringing significant profits for itself and bringing the once glory days back to the smartphone maker.
In the recent earnings report, the firm didn’t provide the segregated revenue generated from the prestigious phone. Nevertheless, the general state of the sales falling flat did indicate that the phone couldn’t reap the anticipated sales.
The smartphone maker blamed the slowing sales due to the market saturation. It is indeed truth that the US smartphone market has been saturated but markets outside the US carry excellent opportunity. Consumers in the markets of India and China are budget conscious; therefore, they don’t go for the devices carrying exorbitant prices. This the chief reason for Samsung selling varied range of smartphones to cater to the demands of the customers at the lower end of the market.
Last month, Apple released its $399 prized smartphone under the name iPhone SE. It took the initiative to step inside the lower end of the market and boost its sales. BlackBerry PRIV costs around $700, which is quite exorbitant for the emerging consumers. In addition, users who are not budget conscious look for the upgraded features and innovation in the latest models and this is where the company lacks.
BlackBerry has to realize that its game is against the tech giants, such as Samsung and Apple, who are consistently working on innovating their products. If the smartphone maker has to keep its hardware business running, it has to make the products which can easily compete with the Apple or Samsung’s devices.
After analyzing the strength of the rivals and the company’s current stand in the market, it can be advised to the Canadian firm that the prudent decision would be to exclusively become a services and software entity significantly focusing on cloud. This transition is likely to help the shares to trade well at the market.
At the market close on Tuesday, BlackBerry Ltd.’s stock stood at a price of $7.12. The 52-week range of the stock is $6 to $11.