Its stock falls again. After reporting quarterly earnings that demonstrated a drop in every metric, including smartphone sales, shares of BlackBerry’s (BBRY) responded by dropping. There is much investors must concern themselves with on the hardware side of the business. Fortunately, key acquisitions in the year will result in meaningful profits as MDM/EMM (mobile device management / enterprise mobility management) consolidates.

BlackBerry patent licensing

BlackBerry is now comparable to Universal Display (OLED). The OLED supplier earns the bulk of its patent fees from Samsung (SSNLF), but the payment schedule is irregular. This means unsteady revenue quarter after quarter. The revenue from patents is small but meaningful.

Privatization still an end game

BlackBerry’s falling stock price is a mixed blessing. The firm issued a billion dollars’ worth of convertible debt, with a conversion price of $10. The company initiated a 47 million share buyback, and added another 15 million. While some shares are used for compensation, the rest may be saved up for the eventual dilution from the conversion. That means the company’s buyback will generate highly levered returns, provide the business rebounds.

15 years from now BlackBerry will not likely trade as a public company. Most Canadian-specific turnarounds in tech took 3 - 8 years to consolidate share price (BlackBerry is now on year seven in its bust-turnaround, which started in 2007). After that, company's market cap exploded higher or was bought out. Examples: Cognos, Newbridge Networks, Jetform, and Hummingbird.

Apple (AAPL) 6s/6S Plus is all the rage, but carriers are spurring demand by essentially offering lease-to-own. A plummeting economy could endanger sales. My employee plan asks for a $700 deposit or $1,300 outright (CDN $) for the latest Apple.

Xiaomi turned in to a 0 BN to $40.6B market cap. Did it in around four years. BlackBerry may clearly win back Crackberry users on Samsung/android, but it's too early to say. All that's certain is that security in the enterprise and physical keyboard are hugely important for real estate sales people, business users, those serious on having a phone to make money.

BlackBerry dumps BBOS10, embraces Android with BB containerization

Though Passport and Classic had initial momentum, which faded as BlackBerry’s device unit operated unprofitably in the last quarter. The company sold just 800,000 units. The problem is obvious: insufficient demand for the rock solid BBOS10. Chen said there are not enough apps to sustain demand. There is little advertising or marketing to boost BB10-based devices.

On social networks, interest in “BlackBerry” was steady since May:

Source: Tickertags

On Friday, BlackBerry’s official announcement for Priv created a spike for “Slider” and “Priv” on the social networks:

Source: Tickertags

On a demo on BNN, Chen did not exude confidence for Priv. There is clear demand for Android devices sporting a physical pointer and keyboard, and this will sell. Unfortunately, Chen must step aside and allow its marketing department room to advertise the merits of Priv. Chen must also loosen the marketing budget to all the unit to promote Priv everywhere.

Priv is a success or a failure. If Chen does not give time and money for making Priv the gateway for promoting BES and the add-ons, Priv will fail. The device also requires a partner: if Samsung were to promote the device, Priv may very well be the device of the year.

Priv represents the security Google Android lacks

Investors should think of BlackBerry being the security software arm for Google, which Android badly needs. Apple successfully (and quietly) resolved the security hack from China with the iOS 9 release, but neither Google nor Samsung may afford such security oversight.

What is still unknown is the pricing for 'Priv.' BBRY really ought to generate effective buzz, like one plus two did in NY, take a breakeven approach by becoming a loss leader in Android. BlackBerry generated momentum with leaks of the then-named Slider, Venice. Therefore, the name change negates that momentum.

When Samsung's devices are selling for over $1000 for the Edge, 'Priv' may sell for $349 - $500 to start. Otherwise, BlackBerry will not gain market share in this space and will end up like HTC, Sony.

Further, BBRY should study the growth of Xiaomi and apply that approach in North America. When the high-end Xiaomi device is just USD $209, BBRY could take market share and create demand for secure Androids, as opposed to plain vanilla Android devices.

There is a demand for physical keyboard on Android, but mostly in business. Business users must respond to emails and put out content. Consumers don't - they consume video and read content. Big difference, so there's an opportunity for some demand for BlackBerry’s Priv.

BlackBerry bottom delayed but close

The quarterly miss should mark last final bottom for the stock, provided EMM/MDM sales grow in the 40 – 60% range (it was around 30% last quarter). Priv must sell nearly a million, which will make enough money for reinvestment into Priv’s marketing.