Every year, 24/7 Wall St. identifies 10 American brands that they predict will disappear before the end of the next year. Back in 2012, the site claimed Research In Motion (what BlackBerry was formally called) would disappear. Of course, that never happened, but that little error hasn’t stopped the site from now claiming the brand will disappear in 2015.
24/7 Wall St. continues to use the same methodology in deciding which brands will disappear. The major criteria include:
- Declining sales and losses;
- Disclosures by the parent of the brand that it might go out of business;
- Rising costs that are unlikely to be recouped through higher prices;
- Companies that are sold;
- Companies that go into bankruptcy;
- Companies that have lost the great majority of their customers; and
- Operations with withering market share.
Here’s the reason they think BlackBerry will disappear in 2015:
BlackBerry is about to run out of its nine lives. As recently as 2008, BlackBerry, then operating as Research In Motion, had 19.5% of the global smartphone market. However, following Apple’s introduction of the iPhone in 2007 and Google’s release of the Android mobile operating system in 2008, that figure fell to less than 1% by late 2013.
Despite the fanfare surrounding the release of two new phones last year, sales of the Z10 and Q10 were abysmal. At the end of last year, BlackBerry outsourced its hardware to Foxconn to focus on its software offerings.
The company has positioned its QNX platform as the most secure operating system for mobile communication, and it is now a leading OS in the auto and health care industries. While these are attractive businesses for potential buyers, they are inadequate on their own to make the company viable.
Revenue has continued its multiyear slide, confirming the belief that BlackBerry cannot survive on its own. In the most recently reported quarter, revenue dropped to $966 million from $3.1 billion in the same quarter the year before.
What do you make of 24/7 Wall St.‘s assessment? BlackBerry is on the verge of hitting a new 52-week high, as the stock inches closer and closer towards $12.18.
What’s the reason for the stock rising? BlackBerry’s stock is currently outperforming its competitors. We postulated the rise might be due to investors happy with the last earnings report and how much cost cutting the company has been doing.
Nevertheless, if BlackBerry continues to regain profitability, we will only see the company emerge in a better financial position come 2015… as opposed to disappearing.