Don't Get Too Excited About BlackBerry Ltd.'s Latest Awards

BlackBerry is rising thanks to three new product design awards. Here's why they likely won't help its turnaround.

Jul 8, 2014 at 10:30AM

BlackBerry stock, Sony stock, Apple stock

The Z30 smartphone was one of three BlackBerry Ltd. products to win a Red Dot Product Design award this year. Source: BlackBerry.

BlackBerry Ltd. (NASDAQ:BBRY) kicked off this week with a bang, rising more than 6% after the smartphone maker announced three of its devices have earned coveted design-centric awards. But if history is any indication, don't hold your breath for these awards to actually improve sales of BlackBerry's smartphones.

Specifically, BlackBerry issued a press release Monday touting three new Red Dot Product Design awards given to its Q10, Q5, and Z30 smartphones. Each was chosen by a panel of more than 40 experts, who evaluated 4,815 entries from 53 countries. BlackBerry's managing director of industrial design elaborated, "This award is a welcomed addition to the Red Dot Product Design award the team received for the BlackBerry Z10 smartphone last year."

Great design doesn't guarantee a winning product
And therein lies the rub: The Z10 may have been a well-designed smartphone, but it ultimately turned out to be one few people actually wanted to buy. Taken in isolation, why should we think the Red Dot awards will be any different for BlackBerry this time around?

We should also note among those 4,815 entries, a whopping 1,120 were granted Red Dot awards this year. For perspective, a few other smartphones which simultaneously received Red Dot Product Design awards -- and notably didn't prompt resulting press releases -- include Apple's (NASDAQ:AAPL) iPhone 5c and iPhone 5c, Nokia's 515 and New Asha, LG's G2, and Sony's (NYSE:SNE) Xperia C, M, and Z1 phones.

BlackBerry stock, Sony stock, Apple stock

Sony's Xperia Z Ultra smartphone received a "Red Dot: Best of the Best" award. Source: Sony.

To its credit, BackBerry did point out the fact the successful percentage of entries in the Red Dot Award show is "much smaller" than other international design competitions, which effectively means the pool of products is generally of higher overall quality. Even so, having nearly one quarter of all successful entrants still receive an award makes it feel significantly less special.

What's more, this doesn't include the "Red Dot: Best of the Best" awards, which are the competition's highest honor and given to 72 products with truly exceptional design. In the smartphone category, just two Red Dot: Best of the Best awards were given: one to LG's innovative G Flex smartphone, and the other to Sony's Xperia Z Ultra.

BlackBerry bulls still have reason to rejoice
Now, don't get me wrong: BlackBerry investors have plenty of other reasons to celebrate right now.

The company's most recent quarterly net loss, for example, handily beat Wall Street's expectations as CEO John Chen focused on operational efficiency to drive cost reductions and margin improvement. And because BlackBerry has strategically reduced its reliance on the consumer smartphone market, it can now focus on resuming growth and pursuing sustained profitability through other promising markets like health care and enterprise security.

In the end, though, I'm just not convinced investors should put much faith in BlackBerry's latest Red Dot awards for boosting the company's turnaround.

Leaked: Apple's next smart device (warning: it may shock you)
BlackBerry is looking outside of the smartphone market for growth, but it's also not the only one doing so. In fact, Apple recently recruited a secret-development Dream Team to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out... and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, AND the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Steve Symington owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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