What was once one of the world’s leading innovators in smartphone technology, Canadian tech company BlackBerry Ltd. (TSX:BB)(NYSE:BB) has continued to make progress toward becoming a pure play software as a service (SAAS) company. Since taking over as CEO in 2013, John Chen has completely transformed the former smartphone company from producing hardware to providing security related software solutions for a range of products, with a focus increasingly on the budding autonomous vehicle market segment.
Some analysts have pointed to the sheer potential size of this market as one key long term investment thesis in BlackBerry, noting the company’s strong penetration within this segment as one key driver which should take the company higher over time. BlackBerry’s improving margins have led to the company turning a profit in recent quarters, a very nice turn of events for a company which had turned massive losses for years as it continued to lose market share to global giants such as Samsung and Apple Inc. (NASDAQ:AAPL).
The question remains for investors buying into the company at current levels: can Chen continue to execute at the rate at which investors expect in the near-term, innovating at a rate which will maintain whatever moat the company has? Competitors remain at the ready to take market share away from BlackBerry in key growth sectors such as autonomous vehicles, and while BlackBerry has a nice head start, as we have seen in the past, a first mover advantage in any sector is not bullet proof, making BlackBerry somewhat of a gamble in its current state.
Invest wisely, my friends.
