Research In Motion Ltd (BBRY) Is Poised to Rebound: Apple Inc. (AAPL), Nokia Corporation (NOK)

Between the U.S., the U.K., and Canada, BlackBerry has approximately 19 million subscribers (8.5 million in the U.S., 8 million in the U.K., and 2.5 million in Canada). Most “casual” BlackBerry users have long since switched to iPhone or Android. The remaining users are primarily hardcore BlackBerry fans, and the majority will upgrade to the new BB10 phones over the next year. This will provide a solid baseline of demand to return BlackBerry to profitability in fiscal year 2014 and give the company a chance to rebuild its image.

Early successes
The new Z10 all-touch phone was released in the U.K. on Jan. 31. BlackBerry has not released official sales figures, but according to numerous reports, the phone has sold out at many retailers (particularly the white version). According to Barclays PLC (NYSE:BCS), initial sales of the Z10 have been better than for Nokia Corporation (NYSE:NOK)‘s flagship Lumia 920.

The Z10 also had a solid start in Canada, where it went on sale this week. Pre-order demand was strong, and CIBC claims that approximately 50% of Z10 preorders came from current iPhone or Android users. If that level of “conquest sales” holds up, BlackBerry will easily outperform the market’s expectations in the coming year.

This isn’t Nokia
BlackBerry is often compared to Nokia; the two led the smartphone market five years ago, and are now banking on comebacks with new operating systems (BB10 and Windows Phone 8, respectively). However, Nokia never built the customer loyalty of the BlackBerry brand; there’s no Nokia equivalent of the phrase “CrackBerry.” Upgrade demand from longtime BlackBerry users should drive strong sales for the next year, particularly after the Q10 model (which includes a traditional QWERTY keyboard) is released this spring.

Given these promising beginnings for BB10, it is surprising that BlackBerry still trades at a discount to its book value of $9.3 billion (just under $18 a share). If the company can drive the upgrade cycle over the next year while bringing in some new customers, shareholders will be rewarded nicely.

The article BlackBerry Is Poised to Rebound originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of Apple and BlackBerry. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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