A Tale Of Two Smartphone Companies
The past couple weeks have been very meaningful for the smartphone industry. In fact, two smartphone companies were squarely in the limelight… but for very different reasons.
One company still has a lot to offer the world of smartphones and mobile devices. The other may have just seen its final days as a recognizable brand name.
Whatever happens to Apple (AAPL) and Blackberry (BBRY) from here on out, you can bet this weekend will be looked at as the start of their next chapters.
For AAPL, the future is looking bright. This weekend marked the launch of the latest iPhones, including the high-end iPhone 5S and the more affordable iPhone 5C.
While the company is clearly established and in no danger of running out of cash, investors have been vocal about the retail giant’s need for a boost. Many were hoping for a brand new product by this time, such as the rumored iWatch. Others wanted a far more innovative iPhone.
However, while the iPhone 5S does possess some innovative upgrades, it’s not vastly different than the iPhone 5. And, the goal of the iPhone 5C is not so much innovation, but affordability.
Here’s the thing…
The reception for the new iPhones was better than ever, with long lines and solid reviews across the board. It’s very likely this weekend will break sales records for an iPhone launch.
Moreover, the iPhone 5C could open up an entirely new subset of customers for AAPL, who can’t typically afford the higher priced versions.
AAPL still has some work to do to capture the magic it had back in the early days of iPhone launches. But, it’s clear this is a company that still has an extremely powerful brand name and a very loyal customer base.
On the other hand, this weekend could very well mark the end of Blackberry as we know it.
BBRY management warned on Friday that the company expects a huge quarterly loss of nearly $1 billion. The latest Blackberry phone hasn’t sold nearly as well as expected and the company has to take a massive write down on inventory.
What’s more, the company announced the layoffs of 4,500 employees, or 40% of its workforce. Obviously, BBRY is headed in the wrong direction.
Basically, the latest Blackberry phones are too little, too late. The Blackberry line used to be far and away the most prominent phone featured in the workplace. But whether the company rested on its laurels too long, or Apple and Android phones were just better products, the bottom line is BBRY is likely near the end of the road.
At this point, the best option for the company might be a sale of itself to a bigger player. One thing’s for sure, management has to do something or the Blackberry name will soon only be remembered in financial history books.
It just goes to show, in the business world, fortunes can change in a hurry. And, it’s never too soon to look towards the future, especially in the world of smartphones.
Yours in Profit,
Gordon Lewis
Category: Stocks
