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The Z3 Might Backstop BlackBerry's Eroding Market Share

One thing that has deterred many consumers from buying a BlackBerry (NASDAQ: BBRY  )  device is the fact that BlackBerry does not have as many apps as Apple (NASDAQ: AAPL  )  or Google's (NASDAQ: GOOG  ) Android OS have. But this handicap may be coming at an end.

BlackBerry runs 98% of Android apps
In a recent Wall Street Journal interview, BlackBerry CEO John Chen said BlackBerry BB10 devices could run 98% of all Android apps with no problem at all. And while there are more ways than one to run Android apps, the simplest way is to download Amazon's Appstore app, install it, and you're all set. While not all apps will work, most will.

Will people buy a BlackBerry just because it can now play most Android apps? Probably not. Most people don't want to bother with another app store other than Google's. Remember, the average consumer is not a geek. So there must be another reason to buy a BlackBerry -- and there is, depending on where you live in the world.

BlackBerry is still a name brand in many parts of the world
Ιf you live in one of many developing countries, there are ample reasons to buy a BlackBerry device. One reason is BBM, BlackBerry's popular messenger app. Long before Android devices came along in countries like Indonesia and South Africa, BBM was the best way to communicate for free with family and friends. However, you had to have a BlackBerry device. So BlackBerry became very popular. For example, BlackBerry in 2011 controlled 67% of the Indonesian market.

In South Africa, BlackBerry has been voted the coolest brand overall in the Sunday Times Generation Next 2013 Brand Survey Awards three years in a row.

For similar reasons, BlackBerry became very popular in many other markets. However, when Android's popularity grew and messaging apps like WhatsApp emerged, consumers decided they could do without BlackBerry, buying a cheaper Android device to save money.

So why might BlackBerry become popular again in certain markets?
Because of the simple fact that everyone knows the brand, they have the highest respect for the quality and durability of the devices. BlackBerry's BB10 OS is just as good as other modern-day smartphone operating systems -- granted, with fewer apps.

In addition, BBM was one the main reasons for BlackBerry's popularity, and it is now cross-platform. BBM has been upgraded over the past several months and now offers group messaging, channels -- a Twitter-like stream people and groups to follow, a broadcast-to-all function, multi-chats, shared workspaces, and recently it has been upgraded with voice chat capabilities. BBM alone might be a reason for many old BlackBerry fans to come back to the platform.

BlackBerry's Z3 Indonesian launch is a hopeful sign
After a string of disappointing product launches, BlackBerry has finally done something right. The recent launch of the new Z3 proved to be such a hit that BlackBerry sold out on the very first day.  And while BlackBerry did not specify what that means in term of numbers, the mere fact that all devices were sold out in one day is very positive sign.

And since the Z3 sold well in Indonesia, why should the Z3 not sell well in Malaysia and India also? It should, and intelligence suggests that BlackBerry is about to offer the Z3 in these two markets as well as South Africa very soon.

Bottom line
BlackBerry was once the No. 1 smartphone maker in the world, and it held on to that title for many years. However, it missed the boat when Apple's iPhone and Google's Android OS came along. Today, it has caught up in terms of having its own modern OS, but the fact that it missed the boat has cost it dearly in terms of market share.

But BlackBerry is still a very well-known and respected brand in many countries around the world. And from the looks of it, the successful launch of the Z3 in Indonesia is probably the first indication that BlackBerry might stop losing market share.

We will have more information in the upcoming months about the actual numbers to see if the Z3 has made a positive dent in BlackBerry's operating results. For the time being, the Indonesian Z3 launch is encouraging. This leaves us with hope that this success can be replicated in other emerging markets, and a backstop might be in place for BlackBerry's eroding market share.

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Read/Post Comments (4) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 30, 2014, at 9:46 PM, Martinf888 wrote:

    How good to see George Kesarios confirming what we are all expecting ,i mean that BlackBerry is having a successfull turnaround under leadership of John Chen .

  • Report this Comment On May 30, 2014, at 10:46 PM, wallynm wrote:

    Our extended family are Crackberry addicts with Bolds, Z010s,Q10s and Playbooks. Would not have it any other way. We are hopeful BBLY survives.

  • Report this Comment On May 31, 2014, at 6:11 PM, Vanmusicblues wrote:

    ½% share of market worldwide overall says people don't care to buy BBRY products anymore for various reasons .share of market is predicted to drop 50% more by 2018 with BBRY products suffering the largest device price declines of any supplier. Looking good indeed for a turn around

  • Report this Comment On June 04, 2014, at 7:20 AM, bbryjakarta wrote:

    Blackberry Z3 can not be purchased in Jakarta. It needs to be pre-order.

    no stocks.

    you wonder how serious is Blackberry selling their headset.

    I live in Jakarta, by the way.

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George Kesarios

I focus mostly on technology stocks, but I also venture out to other sectors. Mostly focusing on valuations instead of what makes companies tick. My greatest challenge, finding stocks that can double in 12 months or less.

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