Making the Case for BlackBerry

 | Jan 08, 2014 | 6:00 PM EST  | Comments
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For Portfolio Guru's 2014 Mad Money client portfolios, I am concentrating on contrarian ideas, and there was nothing more contrarian than my recent exclamation: "I actually like my BlackBerry!"

There are still a few dinosaurs like myself who require a physical keyboard (I actually typed this column on my BlackBerry). Plus, the non-BlackBerry options with keyboards are quite limited, and many are just glorified feature-phones.

So, if you want a full keyboard and a fully-loaded phone, you are stuck with the company formerly known as Research In Motion (RIM). The guys from Waterloo, Ontario did an amazingly poor job of brand building and destroyed more than $60 billion in shareholder value since 2007. For the next 20 years, every business school student in America will study their actions as a "how not to" case study.

But those guys are gone, and the damage caused by their incompetence has been priced into BlackBerry's (BBRY) shares. What may not be priced in is just how powerful the BlackBerry 10 (BB10) operating system (OS) can be. The key was RIM's acquisition of QNX in April 2010, which included an Android-based mobile platform.

So, BB10 phones are basically Android phones in disguise, and that open source OS gives BB10 phones widely-used Android guts to go along with the keyboard to push email (which RIM invented, lest we forget) and BBM, which I consider to be the best messaging application on the market.

But why does it seem that nobody knows about it? Again that's brand building (or a distinct lack thereof). The level of dysfunction at the C-Suite level has at times been laughable.

My Q10 shipped with few native apps, and in BlackBerry World (it's like the Apple App Store or Google Play, but again, has virtually zero street cred) I was amazed to find that my favorite apps, including Amazon's (AMZN) Kindle, Netflix (NFLX) and Pandora (P), were simply unavailable for this platform.

Why on Earth would a company ship a phone that doesn't run the apps consumers actually want? Yes, BlackBerry is best for the enterprise, but sometimes faceless corporate drones want streaming music, too. The good news is that this is addressable through a simple upgrade to the latest version of the BB10 OS:  developer.blackberry.com/devzone/blackberry10devalpha/devalpha_update.html (you'll need to set your device to development mode for the upgrade to boot.). Out of the box BB10 operating systems can't do this, but with 10.2.1 (not yet pushed out over the air (OTA) by wireless carriers), Android app files (.apk) are not only available for download, but can be loaded with one finger click. There are many .apk repositories on the Web, but since I "unofficially" downloaded mine, I'll just let you Google (GOOG) those on your own.

Thus, I was able to listen to the dulcet tones of the great Robbie Dupree ("Steal Away") on my Pandora while I wrote this column. Call me, indeed! I also loaded Kindle and Netfilx and I look forward to getting many more apps.

So, I can have my keyboard and my apps, and BlackBerry's decision to allow BBM to work on Android and iOS (which generated 10 million downloads on its first day in Oct. 22) allows me to communicate on equal footing with my Samsung- and Apple (AAPL)-loving friends.

Under new CEO John Chen, BlackBerry is partnering with Foxconn to design a sub-$200 touchscreen phone (mainly for emerging markets, where the BlackBerry brand is still strong), while also maintaining in-house design for future phones with physical keyboards, which previous management seemed to forget are an integral part of BlackBerry's DNA. It's a gradual transition to an Apple-like business model -- and yes, it is happening almost exactly seven years (the first iPhone was announced on Jan. 9, 2007) later than it should have.

But, again, it's what's in the stock, and with 144 million BBRY shares shorted as of the last reporting date, that represents a massive 29.7% of the float and would require 8.5 days of average trading volume to cover.

So, BBRY fits my Mad Money "unloved" criterion, and I am currently running the numbers to determine fair value. At $8.50 per share, though, I am as positively disposed toward the shares for risk-tolerant clients. The fact that I can listen to "Brandy" by Looking Glass while crunching BBRY's numbers is just the icing on the cake. She's a fine girl, indeed.

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