Research In Motion Ltd (NASDAQ:BBRY) remains in make-or break-mode. As analysts fight over its future, and shares swing up and down with increasing volatility, BlackBerry faces an important test in its ongoing battle for survival. The company’s rolling out an innovative new “real-time marketing” initiative in hopes of clawing back market share from its powerful smartphone rivals.
Keep Moving and Z10’s Edge
Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) took 90.1% of market share among U.S. smartphone subscribers (age 13+) as of January, 2013. Against such formidable competition, BlackBerry has a long road ahead and needs to keep moving and innovate with strength.
Research In Motion Ltd (NASDAQ:BBRY)’s latest marketing campaign is called “The Keep Moving Projects,” featuring musician Alicia Keys, author Neil Gaiman, and movie director Robert Rodriguez, all of whom have unveiled YouTube videos for BlackBerry’s initiatives.
With tens of millions invested, the mission for “Keep Moving” is to “takeover” by filling users’ browser with an advertisement resembling the Hub feature that helps users organize their content on the new BlackBerry 10 devices. Research In Motion Ltd (NASDAQ:BBRY) wants users to experience its new Z10, in hopes that it can convert more customers from its stronger rivals.
Frank Boulben, Research In Motion Ltd (NASDAQ:BBRY)‘s CMO, focuses on Z10’s operating system, which is about multitasking and “always-on” features. BlackBerry is like a Hub, providing powerful communication functions with useful features, such as active frames and TimeShift Camera. Boulben is marketing BB10 not only as a communicating device, but also an essential part of everyday living for people with different background.
These Calls Make Sense
With Q4 EPS beating estimates driven by improved gross margin, the analyst is looking beyond the BB10 launch, where the company needs to focus on service innovations. Scott Penner, from TD Securities, stated, “First, we model the enterprise base expanding to 25mm from 20mm to reflect some traction of MDM in the enterprise market. The big opportunity is the remaining current 56mm consumer subscribers. The BBM franchise could be monetized both on the platform and potentially by extending to alternative platforms (Android/iOS). BlackBerry has a start in the payments business with EnStream. There is the notion of licensing BB10 both to alternative vertical markets and potentially to low-end handset manufacturers.”
Cormark upgraded BlackBerry from buy to top pick with a price target of $20.00. Analyst Richard Tse said BlackBerry’s risk/reward “looks good” and made note of recent strength in operating results, which reduces execution risk.Tse also pointed to potential upside in service revenue and momentum in news flow.
By expanding into alternative platforms and providing additional services, such as payment business, BlackBerry should improve its margins. Although it is not certain whether the Keep Moving Projects will help translate into sales yet, they’ll definitely give users a new perspective on Research In Motion Ltd (NASDAQ:BBRY), and allow prospective customers to experience the new design.
Bottom Line
BlackBerry is not for conservative investors. For long-term investors, it will be safer to establish positions after analyzing the latest February/March sales numbers. Until then, Research In Motion Ltd (NASDAQ:BBRY) remains a traders’ heaven and analysts’ battlefield. The author will stay on the side-line until seeing further sales reports in the near-term. On the positive side, BlackBerry’s marketing campaign is a great effort while the company continues to focus on long-term innovation.
The article To Survive, BlackBerry Keeps Moving originally appeared on Fool.com and is written by Nick Chiu.
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