He values the services part of the business at $5.56 a share, and that's assuming the troubled segment reaches a break-even point in the third quarter of next year. Services, inventory, and BlackBerry's network operations now account for an additional $5, $4, and $2 in value a share, respectively, with the higher gross margins adding $1 a share. The $12 increase in BlackBerry's business segments caused the SOTP price target to be raised to $22. Though the price target is being raised and the stock is being upgraded, Gelblum noted he does not believe BB10 is likely to emerge as a third viable operating system in the United States, where Google's Android and Apple's iOS dominate. It's merely being done because of existing BlackBerry customers (of which there are 79 million), upgrading from older platforms to BlackBerry 10. That isn't to say that there can't be room for a niche player in the market, it's just that Gelblum believes BlackBerry will never effectively take on Android and iOS domestically, or globally. Gelblum is modeling a 3.5% market share globally for BlackBerry in fiscal year 2015, a far cry from Android or iOS.
"Since we believe a vibrant apps ecosystem is vital to the success of BB10 longer-term, we see this as step in the right direction, at least leaving the door open to the company possibly making a successful turnaround," Gelblum penned in his note. BlackBerry shares were higher in premarket trading Wednesday, up 6.12% to $15.95. -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Commodity_Bull