Blackberry Passport With Passport Background

BlackBerry Passport is selling for a steep discount to the iPhone 6. Will it matter?  Credit: BlackBerry.

Historically, price hasn't been a factor among smartphone buyers, who've paid hundreds for new iPhones. So when BlackBerry (NYSE:BB) unveiled plans to price the new Passport for $150 less than Apple's (NASDAQ:AAPL) iPhone 6 Plus off-contract, it seemed like yet another gimmick destined to fail. Turns out that may not be the case.

BlackBerry's Passport to smartphone riches?

During last month's earnings call, CEO John Chen said the Passport sold out within six hours at blackberry.com and 10 hours at Amazon.com (NASDAQ:AMZN). He also said "the device is profitable" at its $599 U.S. price point.

The Passport has sold out multiple times in the two weeks since Chen's comments to analysts, according to the blog site mobilesyrup.com. Nor was it available for purchase when I pulled this image from the U.S. store on the morning of Oct. 9:

Blackberry Passport Sold Out

BlackBerry Passport sold out again this week at ShopBlackBerry.com. Credit: BlackBerry.

Shoppers looking for the Passport won't have any more luck at Amazon. As of this writing, three sellers were offering new, unlocked handsets for between $883 and $888 each. Those lucky enough to get their hands on one tend to praise the device.

Collectively, the 104 customers who've rated the Passport at Amazon give it 4.8 out of five stars. Of those, 76 of the 83 to review the phone give it five of five stars. Is there a chance that some of the enthusiasm comes from BlackBerry fans? Of course, but many of those reviewing also have a long history of reviewing other non-BlackBerry products. We can't eliminate the possibility that there's a genuine groundswell of support for the handset -- something BlackBerry has lacked in recent years.

What BlackBerry investors need from the Passport

Chen has said repeatedly that there are 50 million-plus BlackBerry users out there and that he expects to keep most of them via unique bets such as the Passport.

"People stay with BlackBerry because they're enterprise users, [in need of] high productivity [and] security," Chen said during June's fiscal Q1 earnings call. "I would say 80% of that 50 million is this perfect base for us. That's my calculation."

Let's say we take Chen at his word. In that scenario, BlackBerry is aiming to sell 40 million or more Passports to its installed base. At $600 apiece, that's a $24 billion addressable market! Or at least it would be if BlackBerry was piling up a massive inventory backlog. Frequent sellouts suggest the opposite.

So does the balance sheet. According to its latest 6-K filing with the SEC, BlackBerry reported just $113 million in inventories as of Aug. 30 vs. $244 million in March and $941 million at the close of last year's fiscal Q2. There's virtually zero evidence of a buildup of Passport inventory.

Don't bet big ... yet

In a way, that's a good sign. BlackBerry took a beating last summer when the company announced plans to write down over $900 million worth of inventory related to the failed Z10 handset. Taking a more conservative approach with the Passport makes sense, especially with Chen's heavy emphasis on software and services for driving profits.

Apple is taking a different approach with the iPhone, and all signs are that the 6 and 6 Plus will be huge sellers through the holiday season. BlackBerry's Passport won't slow that momentum. You know what? That's OK.

All Chen and his team needed to do was introduce a handset that could stand shoulder-to-shoulder with Apple's latest and not get laughed at. Judging from early sales data and user reviews, the Passport is precisely that sort of device.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com and 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.