Each month, Net Applications watches public data traffic to determine which operating systems people are using. The two key players in the mobile operating systems segment are always Apple (AAPL 0.11%) and Google's (GOOG 10.14%) Android, and for the last 7 months, BlackBerry (BB 2.81%) has steadily lost share. This month's data included a surprise, though. BlackBerry gained a small amount of share. Could this be the first sign of life in a comeback for the handset vendor?
BlackBerry OS gained share In April
BlackBerry reversed course with a market share of 1.20% versus 1.13% in March. Admittedly, this is a very small amount of market share, but the numbers mentioned include tablets as well. Apple was ranked first with 51% of the market and Android was second with 38%. While Apple produces all of the devices utilizing iOS, the market share allotted to Google includes any handset or tablet manufactured that uses the Android operating system. So this group could include Samsung, LG, and Motorola, among others.
Stability alone would have been a surprise
Even stability in market share might be surprising, considering the BlackBerry trade-in program that T-Mobile launched in February. T-Mobile even went so far as to suggest that BlackBerry handsets could be upgraded at a discount to a new iPhone 5s. This brought BlackBerry CEO John Chen to sever the reseller relationship with T-Mobile shortly after the marketing program was announced.
Extreme volatility leaves expectations low
This has been a very active year for BlackBerry shares. At the end of March, the company reported earnings that beat expectations but were overshadowed by a dramatic drop in sales. This prompted a three-week sell-off that took shares down 22.5% in mid-April. Even though this was a disappointing continuation of a trend, BlackBerry did cut costs aggressively, which is the first step in the process of a turnaround. It's just easier to cut costs than it is to accelerate top-line growth.
That top-line growth will have to happen in time. That said, investors appear to have left BlackBerry for dead.
The handset business needs to stabilize for a turnaround to happen
The key for BlackBerry is to stabilize its handset business by focusing on corporate customers and emerging markets while keeping its internal costs low. The manufacturing partnership with Foxconn goes a long way to get costs down, but as the number of models Foxconn manufactures increases, costs could be squeezed lower. Once the cash-flow bleed stops, the company will have the option of shifting assets toward software and services. A profitable handset business would also increase the likelihood of a larger systems vendor purchasing the division, if not the whole company.
Small indicator, but possibly a starting point
We can't say that a turnaround is definitely under way. However, small indications of improvement preview larger, more tangible data points. If nothing else, it may show that market share isn't continuing to slide.
