Why the BlackBerry Stock Price Is Higher Today (Nasdaq: BBRY)

The BlackBerry stock price is up nearly 1% today after jumping 5.53% Friday.

BlackBerry stock jumped after CEO John Chen made several optimistic comments in an interview with Bloomberg on Friday.

blackberry stock priceIn the interview, Chen highlighted how BlackBerry Ltd. (Nasdaq: BBRY) plans to reach $500 million in software revenue by March 2016. Chen also stated that BlackBerry has over $3 billion in cash. While that news sent the BlackBerry stock price higher Friday, Wall Street wants to see what BlackBerry has left to offer in the smartphone department...

On Friday, Nov. 6, BlackBerry launched its first Android-based device known as BlackBerry Priv. There is a lot riding on Priv, as BlackBerry may abandon building smartphones if its latest offering is not successful. According to Gadgets 360, BlackBerry may continue building smartphones if the Priv is successful.

While Chen is optimistic about BlackBerry's future, the Priv may simply be too little too late...

Joanna Stern of The Wall Street Journal said she doesn't know anyone who owns a BlackBerry anymore. "Had BlackBerry's new Priv been released five years ago, things could be different," she said. "I'd own one. You'd own one. Obviously bankers, lawyers and salespeople would have them."

Despite the additional revenue from the Priv, any climb in the BlackBerry stock price will be tied to growth in its software business.

You see, BlackBerry has quietly transitioned into other markets. BlackBerry announced plans to acquire mobile security service WatchDox in April, acquired German mobile security company Secusmart in 2014, and invested in NantHealth in 2014, a medical service involved in the Internet of Things.

And BlackBerry will continue to depend on more than just cellphone sales as we move into 2016. Here's what investors need to know about BlackBerry and BlackBerry stock...

The Future of the BlackBerry Stock Price

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

BlackBerry may forever be seen as an iconic smartphone maker, but it has shifted its revenue focus over the last few years...

In a statement to reporters and analysts in December 2013, Chen announced that he plans to build a security technology center in Washington, D.C., according to Engadget. The technology center could service big government clients such as the U.S. Department of Defense.

This move showcases BlackBerry's new focus and Chen's plan to be profitable by 2016.

As far back as Q3 2014, 54% of BlackBerry's revenue came from its services, according to Engadget. BlackBerry's smartphone sales fell from 3.4 million in Q2 2014 to 2.6 million in Q3 2014.

And BlackBerry's competitors have continued to dominate the industry.

According to MarketWired, Apple Inc. (Nasdaq: AAPL) and Samsung accounted for 66% of all smartphone sales in the United States in Q3 2015.

For BlackBerry, gaining back a foothold through its operating system will nearly be impossible. BlackBerry's operating system market share only accounted for .3% of the entire smartphone operating system market in Q2 2015, according to research company IDC.

It's important for potential investors to accept the shift in company philosophy. BlackBerry's time has passed as a major player in the cellphone market.

Instead, focus on BlackBerry's developments in its software programs.

In Q1 2016, BlackBerry reported a $137 million in software and technology licensing revenue. This represented a 150% increase from Q1 2015.

BlackBerry also announced in early September that it would acquire mobile security provider Good Technology, a deal valued at $425 million. In a press release on Sept. 4, BlackBerry stated that Good was aligned with BlackBerry's strategy to offer customers the most complete end-to-end solution that secures the entire mobile enterprise across all platforms.

The acquisitions add to BlackBerry's bottom line, but improvement strictly through acquisitions raises a red flag for potential investors. You see, the BlackBerry stock price once peaked at $230 a share in 2007. Failure to innovate pushed the BlackBerry stock price down under $10 in 2015.

Buying companies rather than improving internal innovation places BlackBerry on the same path that originally caused the stock to crash.

BlackBerry still needs to show investors its new security sector can provide consistent profitability.

Jack Delaney is an Associate Editor for Money Morning. You can follow him on Twitter and follow Money Morning on Facebook.