Is It Time to Load Up on Research In Motion Ltd (BBRY) Shares?

Unattended emerging markets
The reason Google Inc (NASDAQ:GOOG)‘s Android commanded a dominating 68.3% market share at the end of 2012 was largely the abundance of sub-$250 unsubsidized smartphones available in emerging markets. This race-to-the-bottom approach manufacturers have taken with Android puts Google in position to effectively corner the feature-phone market. At first, BB10’s penetration into emerging markets isn’t likely to be meaningful, considering the Z10, BlackBerry’s first BB10 phone, will carry a $599 unsubsidized price tag. By the end of 2013, BlackBerry is expected to release a total of six BB10 devices, some of which will be intended for the lower-end market.

Transition year
At best, 2013 is likely to go down in the history books as a transition year for BlackBerry. BB10 is still very much within its infancy, and we won’t see any real indication of its reception until the second half of 2013. At the same time, BB10 subscriber fees will be lower than what BlackBerry has charged for past iterations of its BlackBerry OS. Considering that its service revenues made up about 75% of BlackBerry’s gross profit last quarter, this structural issue appears currently overlooked by investors, putting further pressure on the success of BB10. Combined, all of these factors don’t lead me to believe that BlackBerry is a solid long-term investment.

The article Is It Time to Load Up on BlackBerry Shares? originally appeared on Fool.com and is written by Steve Heller.

Fool contributor Steve Heller owns shares of Google. The Motley Fool recommends Google and owns shares of Google and Microsoft.

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