|A New BlackBerry Craze May Be Blooming|
Eric Jackson - The Street FEB 05, 2013 2:15 PM
Good news from the UK bumped the stock price, and more is coming from other non-US markets.
Their geographic location over the last three years has no doubt colored their views of the company. Just think, three years ago, BlackBerry had over 50% of the American market share of the smartphone market. An enviable position, to be sure.
Today, BlackBerry has around a 3% share of the market in the US.
Another way of looking at it is that BlackBerry had 30 million subscribers in the US three years ago and about 17 million today. But that's over a period when smartphone sales around the world have doubled. So BlackBerry -- if it was just growing with the market in the US -- today should have 60 million subs in the US.
If you're American and all the people around you every day are pulling out their Androids (NASDAQ:GOOG) or iPhones (NASDAQ:AAPL), you can't help but turn your nose up at players like BlackBerry and Nokia
It doesn't help when the New York Times runs stories about how cool people in Silicon Valley are embarrassed at being seen using their BlackBerrys by their friends.
But let's put all this social stigma and geographic bias stuff to the side and really take a look at where BlackBerry sells its phones today and what that means for a successful roll-out of their new all-touch Z10 phone and, later, the keyboard Q10 in a few weeks.
The US is still a huge smartphone market in the world and this is still the case for BlackBerry -- even if its market share has plummeted in the US in the last three years.
Even today -- selling two-year-old and older terrible phones for the last little while -- 22% of BlackBerry's global subscribers come from the US. That's double the second-largest market for BlackBerry which is the UK coming in a 11%.
The next-biggest markets for BlackBerry are, surprisingly, Saudi Arabia at 7% and the UAE at 4%. Also at 4% market share are Canada, France, Spain, and the Philippines. Then at 3% are countries like Argentina, Indonesia, and Italy. India is at 2%. Other notable countries are Australia, Nigeria, and South Africa. (All these data are estimated by Tom Astle at Byron Capital Markets.)
So why did BlackBerry do well Monday with the stock up 15%? I don't think it was the BlackBerry TV commercial in the Super Bowl (although I thought it was the right decision for them to spend $3 million or whatever it cost them to reach one-third of the people in their single largest market).
What I think was the real driver of the stock was news out of the UK over the weekend that the Z10 was selling out over there after going on sale last Thursday. It's still not clear exactly how much supply of the new phones different outlets received, but it's still surprising to many that these phones were selling well. Today, the Z10 goes on sale in Canada. Next week, the phone will start selling in the Middle East.
Canada and the UK have traditionally been a stronghold for BlackBerry, capturing a lot of the banker/lawyer/corporate users. The Middle East (Saudi and the UAE) have obviously emerged in the last couple of years as very significant new markets for BlackBerry. Therefore, there's a good chance that, before the end of the month, we will continue to get a stream of good news trickling out of all these markets on how well the Z10 is doing.
Canada has remained in love with the BlackBerry, even if the rest of the world has moved on. CIBC analyst Todd Coupland released a survey Monday that suggested over half of pre-registration orders for Z10s to some Canadian carriers came from current Android and iPhone users. That's stunning if accurate, as no BlackBerry bears (and even some BlackBerry bulls like me) ever would have guessed that.
So, Monday's reports may just be part of a move that could last the next couple of weeks before there's a pullback.
Of course, we will still have to wait for accurate sales data from all these key markets. That could be a few more weeks away. And, of course, we'll get a more definite sense from the company on how the initial February push is going when they report earnings in March.
But, with the high share count still held short, a trickle of good news from these key markets, and the possibility of BlackBerry announcing pre-orders by some of their top carrier customers, it seems to me that reward outweighs risk for the next two weeks -- especially after the big selloff last week.
At the time of publication, the author was long BBRY.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.