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BlackBerry's Making a Huge Mistake

Despite recording a massive $4.4 billion GAAP loss last quarter, shares of BlackBerry (NASDAQ: BBRY  ) have surged more than 20% over the past two weeks as investors remain optimistic regarding interim CEO John Chen's plan to turn around the struggling company.

In addition to honing its focus on its promising enterprise software and messaging businesses, part of that plan involved striking a development agreement with Apple (NASDAQ: AAPL  ) manufacturer Foxconn, the initial focus of which will be to create a low-cost consumer smartphone for developing markets like Indonesia.

But according to the Fool's Steve Symington in the video below, it's a big mistake for BlackBerry to place any energy into bolstering its failing consumer business at this point.

Specifically, Steve says, BlackBerry's missteps in Indonesia have already cost it significant market share as better-funded competitors like Apple and Samsung  (NASDAQOTH: SSNLF  ) continue to expand their presence around the globe.

To hear Steve's full take on why BlackBerry would be wise to instead focus entirely on what it does best, please check out the video below.

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Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

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  • Report this Comment On January 02, 2014, at 2:56 PM, SyDVooh wrote:

    Why is everyone excited that Blackberry is getting products made by Foxconn? Just because Apple uses them too? Difference is Apple produces products people want to buy, and Blackberry doesn't.

  • Report this Comment On January 03, 2014, at 3:27 AM, fauxscot wrote:

    BBY seems to be toast.

    As a late former boss used to tell me, you can cover up a lot of sins with profit. BBY had its day.

    It also had a ridiculous management structure, led by ineffective egos (as opposed to effective egos like Jobs), did not respond to obvious market dynamics fast enough, and has earned its current state.

    It's sad, but not all thrive. Sony had the Walkman, BBY had the first smartphone. Apple appropriated every drop of those two. I think they both had great products, too. Someone may come along and clean Apple's clock, but for the moment, they hold the hilltop and the best anyone can do is build another hill (Goog).

  • Report this Comment On January 03, 2014, at 10:28 AM, FrozenCanuck wrote:

    Steve - congrats on putting your opinion out there on video. With all due respect, I think you could have done a lot more to back up your view.

    BlackBerry's core focus is messaging (BBM) + enterprise. As long as they're going to stick with their own operating system (BB10), they're committed to manufacturing hardware. Period.

    This is a lot more than just a change of manufacturing partners. They're pretty much offloading most of the hardware design to Foxconn too (which Apple does not do).

    I see this as an admission that BBRY can't innovate on hardware and isn't going to try. But they need to sell hardware and they'd rather not take on inventory risk or own the opex associated with it.

    Anyway, rather long video from you, but rather short on specifics to back up your view.

    The good news - you have some real potential to be a polished speaker.

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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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