BlackBerry Ltd , publicized the first images of its Priv smartphone earlier this week. It will be the Canadian tech firm’s first device to run Google’s Android operating system. Expected to be released later this year, the Priv, though highly anticipated, fails to set much assurance among BlackBerry investors.
As of Tuesday, BlackBerry shares have seen a rounded 44 percent fall this year alone. Sterne Agee has given the firm a $6 price target with a Neutral rating. The analyst firm says that it is BlackBery’s shift to a more software intense entity that has helped hinder investment.
BlackBerry Ltd Keeps Stumbling
BlackBerry is expected to see a 46 percent year-to-year fall in smartphone shipments in 2016. It is projected that less than 4 million units will be sold. The gross margins of its devices stand as a formidable obstacle for BlackBerry. They have recently reverted back into double-digit negative, states analyst Rob Cihra. This places the sustainability of the business into question.
All firms in the mobile and consumer tech industry will likely have to deal with weaker demand, reports Cihra. This has been made clear by the trend of falling demand for TVs, PC’s, smartphones and tablets, specifically in regions such as Europe and China.
Along comes the Priv – BlackBerry’s “leap of faith”. The upcoming device will see the company venture into uncharted waters. Before it, BlackBerry relied on its own technology. But after years of competing against Android, it decided to embrace the world’s most used mobile OS and the likely benefits that come with it.
No Compromises from BlackBerry
BlackBerry says that the company is not making any compromises. It is merely adding features to produce the best smartphone possible for consumers. “Priv users will enjoy choice, innovation, security, privacy and productivity,” the firm writes in a blog post. “In other words, no compromises,” the post went on.
Blackberry aims to do away with it prominent BB Service subscription. The firm wishes to place new value added services in the place of its legacy monthly subs.
“It’s challenge, however,” Cihra writes, “is the installed base of BlackBerries is rapidly eroding so multi-OS a necessity and not a feature.”
The company has lost its place at the top to the likes of Apple and Sumsung. Though BlackBerry is now no longer as revered as it used to be, it has multiple opportunities for growth, Cihra states.
With IoT taking center stage globally, Cihra believes BlackBerry would get great results if it ventured into the IoT space. An IoT platform would would boost the firm’s strong QNX embedded software. The idea still might not sit well among investors though. Such an endeavor would yield low profits in its initial phases, Cihra writes.
Other than some very appealing features, no prices or a release date has been published for the Priv. Many believe the company’s accommodation of other OSs could prove very beneficial for BlackBerry.