BlackBerry isn’t as screwed as you might have once thought

People have long been waiting for the final nail to be hammered into BlackBerry Ltd.’s coffin. The fortunes of the once-dominant smartphone manufacturer have all but evaporated, and now its devices occupy just 0.2 percent of the total smartphone market share.

But now it looks like things are improving for the embattled Canadian company. Should we be optimistic about its future?

Raymond James analyst Steven Li thinks so, and has rated BlackBerry Limited as set to outperform expectations, and potentially reach $10.50 per share, but not for the reasons you might think.

In a note to clients, Li said “Stop worrying about hardware… only positives from here on“, and argued that BlackBerry’s salvation would come from its burgeoning software business, which has recurring customers, high growth, and a 30 percent profit margin.

Over the past two years, BlackBerry CEO John Chen has been behind a number of acquisitions, as the it gradually pivots from being a hardware company, to one more focused on enterprise software. In September last year, it acquired Good Technology, who build a product that allows people to securely use their personal smartphones at work.

This follows five other acquisitions that were made in the previous 20 months.

Chen has gone on the record as saying “If we don’t get a good hardware business going, we will consider the software side [of the business]”, which likely spells doom for those who still are fond of the iconic hardware keyboard. That shrinking group includes Kim Kardashian, who just last week unleashed a tweetstorm after her beloved BlackBerry Bold broke, and she was unable to find a replacement.

Although the move from BlackBerry’s own operating system to Android has slowed its death spiral, sales are still nowhere near they were at its peak.

Its latest flagship phone, the Priv, has garnered enthusiastic reviews, but its staggering launch price has meant that sales have been sluggish. BlackBerryfollowed this up with the DTEK50 – a $299 mid-range handset that runs Android Marshmallow and BlackBerry’s security software. But this is essentially arebranded version of the Alcatel Idol 4, which isn’t inspiring anyone.

There’s greater reason to be upbeat about its software side. It just signed a five-year, multi-million deal to run notifications for the US Senate, another with the US Coast Guard, and has even entered the consumer software space with its Hub+ suite of applications for Android, which costs $0.99 per month.