Microsoft Threat
Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone placed third in the U.S. market at 4.6%, up one percentage point year-over-year. Kantar did not mention BlackBerry in the report. During the three-month period ending in March, BlackBerry OS ranked third with 5.2% market share, down from 27.1% in March 2011, according to data compiled by market researcher comScore.
BlackBerry’s lucrative niche enterprise market that provides services to corporate customers faces stiff competition from rival operating systems with powerful security offerings. MobileIron CEO Bob Tinker believes Microsoft Corporation (NASDAQ:MSFT) is steadily stealing share from BlackBerry. MobileIron produces smartphone management software used by 5,000 companies.
“Most of our customers have been planning to support three mobile operating systems – iOS, Android and either Windows Phone or BlackBerry,” Tinker told Bloomberg. “The recent results indicate that BlackBerry is not going to be the third.”
Pete Devenyi, SVP of Enterprise Software for Research In Motion Ltd (NASDAQ:BBRY), stated that the company has received strong support for its operating system. “The adoption of BlackBerry 10 has been very much in accordance with our expectations,” Devenyi told Bloomberg. During the shareholder meeting, Heins said that 19,000 companies have tested and deployed BlackBerry Enterprise Service 10 – about 60% of BlackBerry’s Fortune 500 customers.
Short Interest
Source : Short Analytics (click image for bigger picture)
Short interest in BlackBerry has doubled over the past 12-months, contributing to wild swings in the stock price. As of June 28, 184.4 million shares of BlackBerry are held short, up from 182.6 million shares on June 14. The average number of days to cover decreased from 9.4 to 5.3 days. With more than 35% of shares short, the company has become an unattractive investment opportunity. If BlackBerry successfully completes its transformation process and returns to profitability, short-sellers may cover their short positions to lock-in profits—causing the stock price to increase and attract new investors to the company.
Heins wants investors to understand that re-inventing a company is a difficult task and it does not happen overnight. Investors need to stay patient during the full roll-out of Research In Motion Ltd (NASDAQ:BBRY)’s products and services in order to see a return on their investment. In the short-term, BlackBerry remains an unattractive company compared to Apple, Google and Microsoft. In the long-term, BlackBerry strives to grow the business with its revamped product ecosystem, return to sustainable profitability and recover lost market share from competing brands. Patient investors will benefit from BlackBerry’s turnaround.
The article BlackBerry Competition Heats Up, Short Interest Rises originally appeared on Fool.com and is written by Christopher DeSousa.
Christopher DeSousa has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Christopher is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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