As I’ve outlined in previous columns, there are many reasons to like BlackBerry Ltd (NASDAQ:BBRY) stock. The company’s upcoming IT security systems for autonomous vehicles, its product for tracking truck loads, which has been adopted by FedEx Corporation (NYSE:FDX), its huge potential in the government security space, its enterprise mobility management systems, and its licensing deals can all generate huge profits for BlackBerry in the medium term, significantly boosting BBRY stock in the process.
But now there are three more reasons to like the outlook for BlackBerry and BBRY stock. Specifically, sales of the KeyOne device — a 4G LTE device which uses BBRY software and generates royalties for BlackBerry — appear to have been quite strong; BBRY has again been named the top enterprise mobility management vendor by technology research firm Gartner (NYSE:IT); and BlackBerry, by deciding to license its software for Android, has added yet another huge potential positive catalyst for BlackBerry stock.
Strong KeyOne Sales
TCL, which manufactures and markets the KeyOne, said the device has been “a runaway success,” according to GSNArena, with the product selling as quickly as it can be made. The device is still being added to new markets, reaching 35 as of Aug. 29 and expected to expand to 50 by the end of the year, GSMArena reported. Moreover, the company intends to launch a new touchscreen-only BBRY branded device in October. Since the KeyOne only became available in the U.S. and Canada on May 31, the day BlackBerry’s previous quarter ended, and the product has expanded to many markets since then, BlackBerry’s licensing revenue probably rose significantly in the August quarter versus the May quarter. Although companies sometimes exaggerate the demand for their devices, the fact that TCL is launching another BlackBerry device so soon and is releasing the KeyOne in so many countries indicate that sales of the device are fairly strong.
One of the country’s most renowned tech research firms, Gartner, for the second year in a row has given BlackBerry its “highest score for all six use cases in its Critical Capabilities for High-Security Mobility Management,” American Security Today reported. The strong vote of confidence from Gartner indicates that BlackBerry remains ahead of its competitors in the security intensive enterprise mobility management space. As a result, BlackBerry should continue to win more EMM deals with large enterprises, expanding on the contracts it has already received from a dozen European national banks, including the Bank of France; Magna International Inc (USA) (NYSE:MGA), one of the world’s largest auto parts makers; and the city of Providence, Rhode Island. Future deals will significantly boost BlackBerry profits, enabling BBRY stock to rally.
Licensing Secure Version of Android
India’s Economic Times newspaper reported Aug. 24 that BBRY was “in talks with various global smartphone makers” about licensing its secure version of the Android operating system to them. Given the security shortcomings of Android, the right to use BlackBerry’s much more secure version of the operating system is likely to be quite valuable to other smartphone makers who utilize Android. Consequently, these smartphone makers may very well be willing to pay significant licensing fees to BlackBerry for its version of Android.
BlackBerry looks poised to obtain significant licensing revenue from KeyOne sales and from allowing other smartphone makers to use its operating system. Meanwhile, Gartner’s glowing assessment of BBRY’s EMM business indicates BBRY is well-positioned to gain additional customers going forward, providing BlackBerry stock with another positive catalyst. Given these new positive developments, investors should definitely continue to purchase BBRY shares.
As of this writing, Larry Ramer owned shares of BlackBerry.