Why BlackBerry's stock is once again a darling in Canadian markets, having soared 70 percent in two months, is better explained by a visit to trucking firm Titanium Transportation.
BlackBerry fleet-tracking service known as Radar that uses $400 boxes to collect and transmit information on physical contents, temperature and movement of Titanium's 1,300 truck trailers has bene adopted by the trucker - nestled in an industrial area some 50 kilometers north of Toronto.
Company executive Marilyn Daniel said that positioning it to cut the number of trailers by five percent and also reduce labor costs, efficiency gains tied to Radar should allow Titanium to get maximum utilization of its fleet.
"Time is everything in our world," she said. "Being able to tell a driver where exactly a trailer is as opposed to having a driver search through a yard for sometimes hours has been a definite improvement."
By steering the company away from consumer electronics and back to its roots of selling products to businesses, Radar is emblematic of BlackBerry Chief Executive John Chen's strategy for turning around the Canadian icon.
Other types of software for industrial customers is also among the bets of BlackBerry - beyond Radar. While promoting its cyber-security software and services to thwart increased threats from hacking, it is leveraging its QNX subsidiary's software foothold deep inside car infotainment consoles to expand into self-driving technology.
Followed by news in April of a nearly $1 billion cash windfall from arbitration with Qualcomm expected to fund future investments in growth, BlackBerry showed signs of progress in quarterly earnings results at the end of March, which helped its stock to rally.
While t its smartphone peak, BlackBerry had annual sales of $20 billion, and recent expectations were that for the first time since 2004, there would revenue decline to below $1 billion this year. But those data came in the face of the expected revenue decline.
According to U.S. securities filings, Oppenheimer Funds, which added 3.3 million more shares to its existing 4 million share stake, and Nokota Management, which took a new position with almost 4.8 million shares in the first quarter, were among the institutional investors for the recent BlackBerry bulls.
Their stakes by around a quarter as of the end of March, were each raised by Iridian Asset Management and Connor, Clark & Lunn Investment Management, two of BlackBerry's biggest shareholders.
However, there are risks with this strategy. U.S. telecommunications giant Verizon Communications Inc., Omnitracs, Teletrac Navman, Tomtom NV and Trimble Inc are among the rivals that BlackBerry faces while entering the telematics market. In order to buy GPS vehicle tracking firm Fleetmatics Group Plc., $2 billion was paid by Verizon last year.
Nicholas Farhi, a partner at OC&C Strategy Consultants who advises companies on optimizing logistics operations said that Radar "is not a unique and earth-shattering product."
Saying it is too soon to figure out how to properly value the new BlackBerry offerings, that's why some investors advise caution.
"It's not the type of situation you can justify from a valuation standpoint," said Tim Ghriskey, chief investment officer at Solaris Asset Management, which manages more than $1.5 billion and exited the stock a decade ago, when BlackBerry phones were still dominant. "It is all about hope and promise."
(Source:www.reuters.com)
BlackBerry fleet-tracking service known as Radar that uses $400 boxes to collect and transmit information on physical contents, temperature and movement of Titanium's 1,300 truck trailers has bene adopted by the trucker - nestled in an industrial area some 50 kilometers north of Toronto.
Company executive Marilyn Daniel said that positioning it to cut the number of trailers by five percent and also reduce labor costs, efficiency gains tied to Radar should allow Titanium to get maximum utilization of its fleet.
"Time is everything in our world," she said. "Being able to tell a driver where exactly a trailer is as opposed to having a driver search through a yard for sometimes hours has been a definite improvement."
By steering the company away from consumer electronics and back to its roots of selling products to businesses, Radar is emblematic of BlackBerry Chief Executive John Chen's strategy for turning around the Canadian icon.
Other types of software for industrial customers is also among the bets of BlackBerry - beyond Radar. While promoting its cyber-security software and services to thwart increased threats from hacking, it is leveraging its QNX subsidiary's software foothold deep inside car infotainment consoles to expand into self-driving technology.
Followed by news in April of a nearly $1 billion cash windfall from arbitration with Qualcomm expected to fund future investments in growth, BlackBerry showed signs of progress in quarterly earnings results at the end of March, which helped its stock to rally.
While t its smartphone peak, BlackBerry had annual sales of $20 billion, and recent expectations were that for the first time since 2004, there would revenue decline to below $1 billion this year. But those data came in the face of the expected revenue decline.
According to U.S. securities filings, Oppenheimer Funds, which added 3.3 million more shares to its existing 4 million share stake, and Nokota Management, which took a new position with almost 4.8 million shares in the first quarter, were among the institutional investors for the recent BlackBerry bulls.
Their stakes by around a quarter as of the end of March, were each raised by Iridian Asset Management and Connor, Clark & Lunn Investment Management, two of BlackBerry's biggest shareholders.
However, there are risks with this strategy. U.S. telecommunications giant Verizon Communications Inc., Omnitracs, Teletrac Navman, Tomtom NV and Trimble Inc are among the rivals that BlackBerry faces while entering the telematics market. In order to buy GPS vehicle tracking firm Fleetmatics Group Plc., $2 billion was paid by Verizon last year.
Nicholas Farhi, a partner at OC&C Strategy Consultants who advises companies on optimizing logistics operations said that Radar "is not a unique and earth-shattering product."
Saying it is too soon to figure out how to properly value the new BlackBerry offerings, that's why some investors advise caution.
"It's not the type of situation you can justify from a valuation standpoint," said Tim Ghriskey, chief investment officer at Solaris Asset Management, which manages more than $1.5 billion and exited the stock a decade ago, when BlackBerry phones were still dominant. "It is all about hope and promise."
(Source:www.reuters.com)
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