BlackBerry's Big Pentagon Win Was Only a Mirage
Earlier this week, shares of BlackBerry surged more than 12% higher on reports that the Pentagon still loves its secure smartphones with hardware keyboards. The Department of Defense supposedly "supports 80,000 BlackBerry phones," far ahead of Apple iPhones or Google Androids. The two leading mobile consumer platforms only add up to about 1,800 devices on the DOD network.
It's not that a single order of 80,000 units would have turned the tables for BlackBerry. Apple routinely ships millions of iPhones in a given quarter, and Cupertino is the underdog to Android volumes on a global level. But having Pentagon's engagement in a public statement could have fueled a comeback of sorts, building a raft of new orders around the professed trust of the planet's most advanced military. If nothing else, it's a good start to potentially better days.
However, BlackBerry investors didn't read the fine print. Those 80,000 BlackBerry phones weren't new orders, but simply a rash of leftovers from the Canadian company's glory days.
The original press release breaks out a plethora of specific device names for the circa 2,000 non-BlackBerry devices in use, from the aging Apple iPhone 4S to the far newer iPad 4. But it doesn't break down the specific BlackBerries in action. The bulk of these are probably older versions, not the BlackBerry 10 smartphones that were supposed to save the company's bacon.
And a Pentagon spokesman confirmed the lack of new BlackBerry orders in an email to The Verge:
Absolutely no new orders have been placed for new BB devices. The DISA press release put out January 16 never alluded to any devices being purchased. The 80,000 BBs and 1,800 non-BB devices referenced in the release are legacy systems already in DOD inventories.
So BlackBerry shares plunged as much as 8% on this revelation. Investors hate having the rug pulled out from under them, especially when they're resting on seemingly spectacular news.
John Chen, BlackBerry's new CEO, does seem to have his head screwed on straight and might be able to save the flagging company from certain doom. But the game is rigged against him, and his victory will probably be Pyrrhic at best. "If we are victorious in one more battle with Apple and Google, we shall be utterly ruined."
I wouldn't recommend buying BlackBerry shares these days, other than with poker chips and money dog-eared for gambling adventures. Investing isn't quite the right word here.
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The article BlackBerry's Big Pentagon Win Was Only a Mirage originally appeared on Fool.com.Fool contributor Anders Bylund owns shares of Google. The Motley Fool recommends and owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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