Research In Motion Ltd (BBRY) to Zero (But Not Yet)

Nearly 70% of literate adults will have a smartphone in four years. As Suster said, lower prices and more networks are driving the growth. As a result, BlackBerry cannot compete. Proof of concept is within India where Sunil Lalvani, a BlackBerry managing director, recently stated that the company is losing market share to Nokia and Microsoft. Why? BlackBerry does not sell a unit below $100. Further, as evidenced by the following chart from Benedict Evans, Apple Inc. (NASDAQ:AAPL) already dominates the high end market.

As a result, BlackBerry is being pinched out of business. Unless CEO Thorsten Heins has a trick up his sleeve or new products generate large revenue numbers, BlackBerry may become obsolete in the coming years. Even though it boasts an extremely strong balance sheet, its business model must change or improve if it wants to survive.

Suster is right

Google Inc (NASDAQ:GOOG) is the king of the mobile industry. Its Android platform continues to attract customers and set industry standards. In short, Google foresaw and mastered the move toward low prices, more networks, and customer preference. Google buying Waze for $1.3 billion seems ridiculous, especially with Google Maps. However, the tech giant wants to increase user engagement, keep Waze out of competitors’ hands, and add additional features. BlackBerry should learn from Google.

BlackBerry’s only chance

I used to think BlackBerry was going to zero. But, it is not. For now, it is even trading below its book value. For this reason and because of its new products, BlackBerry has bought some more time. But if it doesn’t change it ways, it will soon be on life support.

Brendan Marasco has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Brendan 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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