Apple Inc. (NASDAQ:AAPL) and Blackberry Ltd (NASDAQ:BBRY) according to analysts are contrasting technology stocks which pack several ‘gems’ for investors to explore. That is to say, that investors need to take a deeper look at both stocks individually. Then apply the contrast and compare method to realize where Apple Stock soared to 989% from its beginnings and why others like Google Inc (NASDAQ:GOOG) languished at just 137%.
Often times, companies fail to adapt and the same thing happened with Blackberry as well. At one point in time, Blackberry had dominated the market through its devices and services.
In 1999, Research In Motion (RIM) now BlackBerry Ltd., unveiled its first “BlackBerry” devices which gave secure real-time push-email communications as well as services such as BlackBerry Messenger which provided all the needed communications integrated into a single Smartphone. Near the end of 2012, RIM gave the news that its 200 millionth BlackBerry Smartphone was shipped. That means, up until 2012, RIM, now BlackBerry Ltd was the dominating force in the Smartphone arena.
In January 2007, the iPhone was introduced to the market and between July 2007 and August 2008, BlackBerry was trading north of $100 a share.
However, things changed with the launch of the iPhone by Apple in June 2009. It was more like a toy at the beginning, but then slowly people got used to it. Just when the mobile revolution was supposed to start, Apple tied up with telecom carriers like AT&T and others to offer its iPhone. Apple didn’t disappoint its customers with the product. It can be said that Apple or specifically the iPhone, actually started the mobile revolution and mobile competition as a consequence.
Another investor ‘gem’ to discover
The ‘pairs trade’ between Apple Inc. (NASDAQ:AAPL) and Blackberry Ltd (NASDAQ:BBRY) have other things to reveal as well. When apple launched its iPhone, Blackberry dominated the corporate spectrum and its stock achieved its highest ever market cap, $120 billion in July 2007. After which it remained complacent allowing Apple Inc., to collaborate with carriers in different spectrums, despite its expensive handsets Blackberry merrily discounted Apple Inc.’s ways as a learning curve for new entrants. However, within a short period, for those investors who stuck it out and waited for the ‘philosophy’ of a thesis to play itself out at the stock market, today’s 989% gains are incredible.
Apple Inc. (NASDAQ:AAPL) and Blackberry Ltd (NASDAQ:BBRY) are contrasting technology companies and it was only Google Inc which could create the competition for the iPhones with its Android phones. However, as a stock, the search engine giant too remains a distant competitor, as it has gained roughly 121% from its baselines.
Article by Eric Jackson at thestreet.com gives more insights on the lessons that can be learned from the pairs trade.
