Share price of Research In Motion Ltd (BBRY - Free Report) surged as it got a significant boost in its effort to popularize its latest BB10 OS (Operating System) based handsets. BBRY announced that it has won a huge order of 1 million BB10 OS-based handsets from one of its established carrier partners, which is the largest single purchase order in the company’s history.
Though shipments of the phone are expected to start immediately, BBRY has neither disclosed the location of the established partner nor has it divulged any information about the specific model, which received the huge order.
The maker of BlackBerry also received another positive news, with Verizon Wireless’ announcement that it will start offering the phone from the last week of March. However, rival carrier AT&T Inc. (T - Free Report) has already announced that the phone will be retailed from their stores from Mar 22, 2013, preorders of which have already started.
Both the positive news pushed the share price higher to $15.65, up 8.1% at the end of trade on Mar 13, 2013. This is the second jump in the BBRY share price in the last 3 days as the stock price increased by 14% on Mar 11, 2013, based on the news of US launch of the phone by AT&Tand takeover rumor by China’s Lenovo Group.
Research In Motion, once the global leader of smartphones has been struggling over the last 3-4 years, as they failed to identify consumers’ preferences and has been battling in a crowded smartphone market mainly dominated by Apple Inc.’s (AAPL - Free Report) iOS and Google Inc.’s (GOOG - Free Report) Android Platform.
In an attempt to recover its falling smartphone business, BBRY launched its much-awaited BB10 OS-based device on Jan 30, 2013. The phone is already on sale in 20 different counties and has seen robust demand for its flagship device in some of the markets including U.K., Canada and U.A.E.
We believe this is a big impetus for BBRY and shows the confidence the customers have in its as yet untested operating platform. Recently, the company announced that it has witnessed strong customer switch from other OS platforms to their latest BB10-based device.
This massive order win will be a major boost to the company’s top line in the coming quarters and readjust its position in the smartphone market. However, the company still has to vend off competition from Samsung Electronics’ latest gadget S4, which is expected to be launched Mar 14, 2013.
Currently, Research In Motion carries a Zacks Rank #3 (Hold).