Could The BlackBerry (NASDAQ:BBRY) Passport Save The Company From Failure?

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By Mark Michaels on September 26, 2014 Company, Technology & Software

After the first couple days of launch, BlackBerry (NASDAQ:BBRY) sold about 200,000 units of its new Passport smartphone device. This pales in comparison to Apple Inc (NASDAQ:AAPL)’s sales figures for its new iPhones 6 and iPhone 6 Plus devices over its opening weekend.

However, BlackBerry’s sales figures may be more impressive than they appear.

With a market capitalization of $5 billion, BlackBerry cannot compare to Apple, whose market capitalization is $603 billion. However, it is useful to look at the unit sales of each company’s new device per $1 billion of market capitalization.

Using this calculation, Black berry sold 40,000 units per billion of market capitalization, while Apple only sold 16,584. On this basis, the BlackBerry Passport outsold the Apple Phones more than two times over.

There are a few things that the BlackBerry Passport holds over the Apple iPhone. For one, the Passport can easily fit in a shirt pocket. The display screen is extraordinary, displaying crisp content on a screen that is clean and visible at an incredible amount of detail.

The screen resolution is 1,440 by 1,440, which offers 453ppi, which can compete against basically every smartphone on the market from competitors. The iPhone 6 Plus trails behind the Passport’s resolution, which just 401 ppi; the smaller iPhone 6 has just 326 ppi on a 4.7 inch display screen.

The Passport’s Snapdragon 801 processor is very fast, with 3GB of RAM.

In terms of applications, the Passport is pre installed with the Amazon.com App Store, which has approximately 277,000 applications that run perfectly on the Passport, eliminating the need for a side load. This is one of the most important improvements over the BlackBerry World, but it still trails behind both Apple’s App Store and Google Play by a long shot.

BlackBerry Blend is another interesting feature. It basically gives the user to the ability to view and use content from his or her desktop or tablet on his or her smartphone. According to professionals in the IT field, this capability is very useful in enterprise situations.

Additionally, the Passport’s keyboard is one of the best on the market. Due to the size of the smartphone, the individual keys are relatively large and easy to use. The device has a row of virtual keys that appear above the actual physical keys, which can detect the context of the typing and suggest keys that the user may otherwise need to use a SHIFT of CTRL key to type on a normal keyboard.

Based on rough estimates, the cost for BlackBerry to produce a Passport phone is somewhere around $250. Knowing that one unit of the Passport devices sell for $599, and giving a margin of 30 percent to resellers, one device should give the company a profit of $169 for each unit sold. This is just a bit more than a 40 percent margin on net proceeds that go to BlackBerry of $419 per Passport device.

In more ways than one, the Passport will be a niche product that appeals to professional who value clear images and security above all else. These people have no need for most of the applications that are targeted towards casual users. In this target market, the BlackBerry Passport should perform very well.

Of course BlackBerry is much more than the Passport. The company is growing its software business, namely its mobile device management software. The company also has plans to improve its other devices like the BlackBerry Classic by the end of the year. Given all that, the BlackBerry stock can be considered a reasonable speculation.