23 Jun

Why a new product line-up is important for BlackBerry’s growth

WRITTEN BY Puneet Sikka

A new product lineup important for BlackBerry to compete effectively

In the previous part of this series, we discussed how BlackBerry’s (BBRY) earnings for fiscal Q1 2015 were better than expected. The main reason for these better results was better-than-expected smartphone sales and cost cutting efforts by BlackBerry’s CEO, John Chen. However, it’s important for BlackBerry to continue to produce a new and innovative product lineup to compete in the highly competitive smartphone market. Let’s take a closer look at what BlackBerry plans to do in the coming months.

Why a new product line-up is important for BlackBerry’s growth

BlackBerry’s market share continues to decline

According to a report from IDC and as the chart above shows, BlackBerry’s share in the global smartphone operating system market has declined from 2.9% in Q1 2013 to 0.5% in Q1 2014. BlackBerry’s competitors have done well in the last year. As of Q1 2014, Google’s (GOOGL) Android OS continues to gain strength and has about 81% share of the global smartphone OS market, while Apple’s (AAPL) iOS and Microsoft’s (MSFT) Windows Phone maintained their second and third positions, respectively.

BlackBerry plans to launch a new smartphone lineup

During the conference call to announce BlackBerry’s earnings, management mentioned that the company’s Z3 smartphone is doing extremely well in Indonesia, and the company also plans to introduce it in Vietnam and a number of countries, including India, this quarter. Management also mentioned that the company will host an event in September to showcase its new product lineup for the rest of the fiscal 2015. The company will launch a smartphone named Passport in September, followed by Classic in November this year.

BlackBerry also plans to launch new software products

Management said that the company plans to launch a number of products for its software and services segment as well. The company is planning to release its popular BlackBerry Messenger (or BBM) service for Windows in July this year and then BBM Meetings in September. The company also plans to release BES12 and the QNX cloud service in November or December this year. If the company’s new proposed product line-up does well, it will benefit ETFs such as First Trust Value Line Equity Allocation Index Fund (FVI), which has high exposure to BlackBerry.

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