VP and Head of U.S. Public Sector Q&A

Jeffrey Ait shares why he joined BlackBerry

Aiming to create new revenue streams

BlackBerry opens Technology Solutions Business Unit

Editorial

Can BBM Protected boost BlackBerry’s earnings?

Turn around takes time

BlackBerry shipments on the rise under John Chen's direction

Editorial

New COO at BlackBerry another sign of software focus

Editorial

Apple and IBM deal could raise interest in BlackBerry

Editorial

BlackBerry stock is close to a new 52-week high

Editorial

A busy day in the BlackBerry World

Editorial

Analysis: BlackBerry dramatically improves financial performance in Q1

News & Rumors

Press Release: BlackBerry Q1 2015 Earnings Report

News & Rumors

BlackBerry Q1 2015 Earnings Report and AGM Live Blog

Editorial

BlackBerry earnings are on tap for tomorrow!

News & Rumors

A little update on Thursday's BlackBerry Earnings and AGM coverage!

Editorial

I'm going to Waterloo next week for BlackBerry's Annual General Meeting of Shareholders... what do you want me to ask?!

News & Rumors

BlackBerry annual shareholder meeting to be held on June 19th

News & Rumors

BlackBerry to announce First Quarter Fiscal 2015 results on June 19

Editorial

Should BlackBerry bring back Unite as a multi-platform management tool?

Editorial

Looking back at the incredible pace of change at BlackBerry in CEO John Chen's first six months

News & Rumors

Bert Nordberg stepping down from BlackBerry board next month

News & Rumors

Prominent investment group Kahn Brothers increase stake in BlackBerry by 80%

< >

Stock Talk: BlackBerry’s situation for the next year

By Chris Umiastowski on 2 Apr 2014 09:20 am EDT
2
loading...
0
loading...
32
loading...

Last Friday we had a chance to look at the Q4 financials for BlackBerry, and the CrackBerry team held a podcast to talk about it. Were we all doom and gloom? I don’t think it was quite that negative, but we are keeping it balanced and considering the good and bad areas of the business when we talk. No sugar coating.

Over the weekend I did some more thinking about BlackBerry, while enjoying the fact that spring FINALLY arrived in Toronto. I also had a chance to read a well-written report from GMP analyst Deepak Kaushal. While it was quite bearish, I believe the analysis adequately looks at the business. In other words, Kaushal isn’t trying to paint a negative picture on purpose, and he clearly lays out what he believes needs to happen for BlackBerry to hit its goals of being cash flow break even by the end of this year.

One of the things most good analysts do in their forecasts is estimate gross margin for the hardware and software business on a quarterly basis. The company actually discloses it annually, so when this disclosure is given at the end of each year you’ve got to go re-calibrate your model to make the numbers fit in order to reasonably estimate the quarterly numbers. Kaushal estimates that BlackBerry had -19% gross margin in the hardware business last quarter, an improvement from -35% in prior quarter.

My thinking: It’s scary to see hardware margins so firmly in the negative, but it’s great to see the big quarter over quarter change. It really helps me get my head around the possibility of zero to slightly positive margins in the hardware business sometime this year. If Kaushal’s Q4 estimates are right and we assume BlackBerry gets hardware margin to 0% while keeping hardware revenue flat then it implies about a $70M increase in gross profit. That would go a long way towards putting the company closer to cash flow break even.

It’s scary to see hardware margins so firmly in the negative, but it’s great to see the big quarter over quarter change

But as Kaushal correctly points out, the service business is the big mover right now. This service revenue is probably a mix of 20% enterprise customers and 80% BIS customers, and brought in $546 million in the last quarter, with margins in the low 80% range according to Kaushal’s estimates. This revenue has been eroding at about 13% per quarter, so if this happens again in Q1 it will shrink the gross profit by almost $60 million in a single quarter.

Think about it. If BlackBerry can get hardware margins to zero the upside from this will be lost, almost entirely, with a single quarter of service revenue declines that stem from a reduction in BB7 subscribers.

So if BlackBerry is to actually get the company to cash flow neutral by the end of this year it needs to hold service revenue flat, keeping margins flat, while also bringing the hardware business to zero margin (from negative today).

Can they do it? I think on hardware they probably can. The huge improvement in Q4 gives me some confidence in that regard. But on the service front I don’t see how they’ll stem the revenue decline unless BB7 demand remains very robust all year long. Remember that we have low cost BB10 phones coming - something I think is the right move.

Also remember that BlackBerry probably doesn’t have any material new revenue streams to turn on in the services side of the business until BES12 is released later this year. This leads me to believe that BlackBerry’s cash flow break even forecast heavily relies on the last quarter of the year, where they expect to sell a lot of BES licenses. Also, it’s possible that hardware margins could continue to turn upwards, leaving them with a profitable hardware business in the current fiscal year.

All in all, the company is in a tough spot. The rest of calendar 2014 is not going to be pretty on the financial statements. But I think there’s a good chance they are capitalized well enough to take them through the transition if they execute well.

The story is definitely still interesting, that’s for sure.

Topics: BBRY Editorial

89 comments

Ribes Nigrum

Thanks Chris!

Posted via CB10

Dave79

I cant understand how they went all in with BB10 without coming up with an optional service offering for BB10. They could have made some sort of optional BIS for BB10, okay nobody like to have the browser going throw the NOC but other services like email compression were appreciated. I'd pay to have a BlackBerry Protect that works like on BBOS perhaps with a few more features, I could easily see people pay 4/5$ directly to BlackBerry (cutting off the carriers) for a subscription service like that.

You'd think with so much talent and intelligent people around they would have not make such mistakes.

Dave Bourque

I highly doubt they forgot about that. It seems more like time constraints go rebuild a entire OS with BB10 and the fact that carriers no longer want BIS on any phone.

Z10STL100-3/10.2.1.2141

Dave79

They dont need the carriers any longer for a service like that. They could have easily released it on BlackBerry World.
At the very least they could have made BlackBerry Protect working with the same feature set that BB Protects had on BBOS and easily charge a subscription fee of a few dollars per month.

It doesnt seems that complicated to me.

Now their users got used not to pay any service fee on BB10 and when you lower your pricing it's very difficult to bring it up again, like any business owner is well aware.

Again the carriers have nothing to do with it, BlackBerry could charge for services directly now that it has BlackBerry World.
Also users didnt like BIS only because nobody wanted their browser being slowed down aor not to being able to download larger files. On the contrary the messaging experience on BBOS is much better than BB10 and I'd pay for that. I lost push mail with yahoo account and gmail and google apps account dont works as well on BB10 like they did on BIS.

However if they wanted to keep it simple they only needed a proper BlackBerry Protect subscription service. They could easily have an extra 50 millions per quarter from a proper BlackBerry Protect service.

pdizzle27

BIS is the feature that I miss most. Imo, push email is what made a BlackBerry a Blackberry.

Posted via CB10

AYC2112

Didn't John Chen say he never would have eliminated the BIS revenue stream from BB7 to BB10. If they could reimplement it for bb10 and charge people directly I for one would pay for that. I can see a lot of BlackBerry users liking the compressed data. But for sure the carriers won't go back to that.

Posted via CB10

BionicKris

@AYC2112- I'd pay for it too

Posted via CB10

samvel2001

I would pay $10-15 for push email

Posted via CB10

Puz_zled

I lost true push email too with BB10. When I look at the horrific lag time from the other person sending to my receiving the email it drives me bonkers. I would pay a monthly fee to have true Push back instead of what passes for push from Yahoo. I'd there no way to have message services only go through the NOC?

This post Powered by BlackBerry

Troy Tiscareno

Yahoo doesn't offer ActiveSync (yet), unlike the other major services. The problem here isn't BB or ActiveSync, but rather your choice of email provider. Sad to say, but Yahoo has been WAY behind the times for a LONG time. Marissa may be working hard to fix that, but that's still true for the time being.

johnnyuk

Puz_zled, you didn't lose push email, you gave it up when you moved to BES10 because your email provider, Yahoo, doesn't actually provide push email. BlackBerry were filling in for Yahoo's inadequacies in that department but unfortunately they can't offer consumers that any more (a decision made by the previous management!).

Did you do any research in to BB10 before you bought the phone?

Migrate your email to Outlook.com or somewhere else offering ActiveSync and you will be much happier with your BB10 email experience.

Posted via CB10 on Z30 STA100-2 /10.2.1.2141 on O2 UK - Activated on BES10.2.1

Dave79

Although when we had BIS everybody here was doing nothing than praise it and saying how awful ActiveSync is.

Well my personal experience is that with BBOS and BIS my communication experience was much better and rich than with BB10 and ActiveSync.

XJDHDR

I'm afraid I'm going to have to agree with Troy and Johnny here. I just did a test where I send an email to my Gmail and Outlook email addresses and in both cases, the email was on my phone within 2 seconds.

According to what I've read, Google and Microsoft accomplish this using IMAP IDLE and Exchange ActiveSync, respectively, whereas Yahoo doesn't support either of these but rather uses a custom version of P-IMAP:
https://superuser.com/questions/147448/do-yahoo-mail-and-hotmail-support...
https://en.wikipedia.org/wiki/Push-IMAP

Soulxlight

I can vouch for you there. GMail is excellent on my z10 and I don't notice any lag in receiving email to my online account vs my phone. Yahoo is Terrible all around. Their protocols, spam, storage you name it they are behind Google. I made the transition a number of years ago due to the high volume of spam that gets through Yahoo's spam filter and have not looked back since.

Posted via CB10 on my Z10

NotGoodIMO

That's actually a great idea. Hopefully someone from Blackberry is looking into it. Blackberry probably thought of making some revenue from App world but that doesn't seem to be doing much.

johnnyuk

Dave79 you unfortunately don't understand the full picture when you say BlackBerry don't need the carrier's to implement BIS or a BIS like service in BB10, especially when you say that the answer is BlackBerry World, that makes no sense.

When you pay the carrier for BIS, that is the money BlackBerry are charging the carrier to have a private high speed data link from that very carrier's network straight in to BlackBerry's Network Operation Center infrastructure. The NOC is where legacy BIS does its stuff, and also where both legacy BES and BES10 data, BBM and PIN messages do their thing to get data delivered to where it needs to go with compression, encryption, BBM scrambling and the like.

BlackBerry World existing does not change that one bit. In fact BlackBerry App World existed for years when there was only BIS and BES data plans for BlackBerry OS phones, I don't see how that helps, it has nothing to do with BIS or BES data plans or plain ordinary data plans from carriers.

Posted via CB10 on Z30 STA100-2 /10.2.1.2141 on O2 UK - Activated on BES10.2.1

Dave79

Have you ever thought than perhaps it's you that dont understand? It's really an unfortunate situation when someone think to know everything.

You're right when you say that BBM and PIN messaging make use of the NOC. Correct me if I'm wrong but I can use BBM and PIN on my BB10 without having to pay any fee to BlackBerry, I only need to pay my data plan to my carrier and download the BBM app from BlackBerry World. Same for account integration, it's the NOC that provide all the settings even into BB10.

Now could they develop a BIS app, that offer the messaging services for sure and charge for it without the need of carrier. We already pay for data plans to the carrier, BlackBerry could offer and app on a subscription base.

For example Whatsapp charge directly a year fee to use its service - they dont need the carriers, they charge directly through the different app stored.

The BIS app could take care of messaging restoring BlackBerry push technology and offering a VPN service for example.

But as I said there is a much more simple way to offer a service charge: develop BlackBerry Protect and bring it on par with the Protect on BBOS and perhaps adding some more feature. People would pay a few dollars for such service every month. They could have easily reached a few millions subscribers by now.

However now that people have been using the BB10 devices for over a year and lost the habit to pay a BlackBerry fee it's gonna be more challenging to move people to pay any kind of service.

I'm sure they are working on something like this or else they'd be out of their minds, perhaps some kind of hosted cloud BES12.

mousii

Dave I think you are wrong... and johny is right. the explanation would be too long, I read both of yours so I am not going to retype it all up. if you want, we can talk over bbm :)

Powered by BB

meltbox360

Honestly they could offer some sort of a vpn type service that does this. I'm sure there's maybe a few thousand people that would pay them directly for it.

Posted via CB10

johnnyuk

Meltbox360, unfortunately a few thousand people wouldn't even make it worth BlackBerry drawing out how it would work on the back of an envelope over lunch in the staff canteen.

A few million people and then you're talking, but that's not gonna happen for a long time, the entire BB10 user base is only a few million people.

If they VPN'd traffic to the NOC and back over the carrier's Internet connection, do you think they are gonna just let BlackBerry suck up all that bandwidth for free? Nope. They'd charge BlackBerry so that they could add infrastructure to guarantee bandwidth. That would make monthly costs more than the costs of the existing private pipes in to the NOC because they are new have to be paid for and also because they'd try to profit from BlackBerry and the situation.

BlackBerry would have to charge you the subscribing consumer even more than they currently charge the carrier now, who in turn charges the consumer for BIS.

Posted via CB10 on Z30 STA100-2 /10.2.1.2141 on O2 UK - Activated on BES10.2.1

ggastaris

It shows that they are in fact not intelligent

Posted via CB10

Hassan00

Please Chris, could you write an article about BlackBerry segments, like what is the BlackBerry services? What is their software?
The service is really counting on BIS, how it could survive after the death of BBOS?
I found QNX Revenue is really very low. Why this hype about it so?

Just please let the ordinary people understand these divisions of BlackBerry.
Thanks

Posted via CB10

BionicKris

I'm one of the "ordinary" people who would like to know a bit more about it. ;-)

Posted via CB10

br14

They wouldn't have needed a service offering if the phones had been more successful. Sadly they failed to take account of current market conditions when they launched BB10. (Carriers with locked in minimum sales contracts to Apple; market saturation in the USA etc, pricing well in excess of competitor manufacturers); failing to realize the carriers would not market their devices (if you listen to his interviews Boulben was taken by surprise).

Then there were the mistakes. BB10 wasn't really complete. The Q10 with no trackpad (massive mistake). BES10 that required IT managers to buy new hardware (effectively) and run two separate servers.

These issues were all easily forseeable (if I could do it at the time I'm sure they could) but ignored - that smacks of arrogance and sadly arrogance has been the companies undoing until the day last fall when it was clear BB10 had failed.

They have a chance at recovering but not until a low cost LTE device is launched in the US and Europe and not until BES12 is delivered. They just have to survive until then and defend sales as best as possible - hence the new production run of BB7 devices.

If any one can do it John Chen is the man. Prem Watsa evidently believes he will because he continues to build up his holdings.

freddysrevng3

br....do you have any links of Frank Boulben being surprised at his issues with US carriers?

When he came into his role as CMO - he sold us and, whoever he interviewed with at BlackBerry, that he was expert in working with carriers and that was one of his main strengths.

Apparently, nobody in the interviewing process gave a Damn about his ability to illustrate his track record in this area.

We are still suffering from that...

Founding Member "Club Z30"..."the most exclusive club in mobile"

br14

Can't recall where I saw it now.

Boulben did have a track record in the industry. But in Europe. Not in the USA. He was marketing king at Orange (large European carrier), and head of the GSM Alliance (?) so knew the major players. But clearly had no clue about how business operates in the USA.

Fans complain about the marketing, but in truth there's really no point unless there are channels selling the devices. And you can't even sell devices online at full price if the carriers are subsidizing the competition.

Reading between the lines on what I read it seems BlackBerry started off last year with the big superbowl campaign and a couple of TV ads, but failed to get any backing at all from the carriers in the USA. Typically it is the carriers who push the devices - at least it is here in Canada.

Later we learn Apple has minimum sales contracts with Verizon etc and the carriers are liable to massive penalties if they fail to meet sales quotas.

The carriers drive BlackBerry owners toward Apple because they're the segment that can afford the iPhone. Combine that with the super low cost Android devices and BlackBerry didn't stand a chance with their bloated cost base.

Basically BB10 - while an excellent OS - was a strategic disaster. Because instead of continuing to make incremental improvements to BB7 (more memory/improved UI/faster processors), they just stopped making any new devices at all until BB10 was launched. Personally I reckon that's because of a change in management that arrogantly assumed the older OS was of no value (not Heinz he came later).

And when BB10 was launched it lacked a host of features on the older devices. OS 10.2.1 is amazing. But it arrived too late to help.

As for BES10 - the blunder there was so obvious it's hard to believe they ever allowed the product out the door.

What they needed was to provide a basic upgrade that did not require senior management approval to implement. Then corporations get BB10 support essentially for free.

What they delivered is a product that requires separate server instance. Therefore requiring spending on hardware and increasing the management cost.

A really poor decision and one that John Chen seems to have wasted little time in resolving.

freddysrevng3

br.....good followup....and, apparently, Orange has nothing to do with a US carrier strategy...

You know what works in US carriers?

Wait....

Wait...

CASH!!!!! Bing, bing, bing, bing...

Motorola paid sales reps at VZ all kinds of cabbage to push that first brick of a Droid...do you remember that piece of feces?

Those pimply faced sales reps sold them though because of cash and support from management...

BlackBerry has never done that...Francois Bubblehead and his crew had no clue how to compete....

Founding Member "Club Z30"..."the most exclusive club in mobile"

Koepman

Positiv!

Since 2010 

freddysrevng3

Umi....spring is coming to Chicago, as well, thankfully....beast of a winter...

Observation: for all the complaining some of do about analysts - they really nailed the one about declining service revenues, due to, BlackBerry leaving OS7.

I remember Thor choking on the answer to the question about this a number of quarters ago in a Q&A after an earnings call....

Also, do you have any sense of what the gripe is between BlackBerry and TMobile?

My local TMob store proudly supports it's BlackBerry clientele.... I was going to bring my 3 BlackBerrys to TMob In a few months - now I have to reconsider.

Your thoughts?

Founding Member "Club Z30"..."the most exclusive club in mobile"

xravishx

The way I understand it is that BlackBerry will no longer have an agreement with T-Mobile to sell BlackBerrys, T-Mobile will continue to support it's current customer base for now, and they will sell through the rest of their inventory.

To me, that means if I want to finance a BlackBerry with T-Mobile, I need to do it now or attempt to jump ship to a provider that supports the company in a better way than T-Mobile has recently.

Nifty Food BBM Channel C003262E5

Prem WatsApp

First two cool mornings here in the North Queensland tropics... a bit of dew on the car and the lawn (the sun has just crossed the equator to the northern hemisphere, and a week or two later, mornings get cooler here)

That loss of service revenue is something they overlooked, and probably hoped to compensate with app sales. But it's not steady and ongoing.

Steady income is SO convenient, that's why a lot of people prefer a job with less freedom, but more security and "plan-ability". Running a small business means you might have a bumper week once, but next week is bleak.

BIS should have been at least optional.

"No Q10?" -> "Buy from Chen... "

freddysrevng3

Well played, prem

Founding Member "Club Z30"..."the most exclusive club in mobile"

Jtaylor1986

What's this t mobile thing about Chris?

Troy Tiscareno

The T-Mobile thing is about T-Mo having only 45,000 active BB customers (TOTAL) and about 94% of existing BB customers upgrading to non-BB phones. At some point, sales are so low that it doesn't make financial sense to keep carrying and supporting BB, and T-Mobile USA got to that point.

I *suspect* that Legere demanded some kind of compensation to continue carrying BB phones, to offset the costs, and I suspect BB couldn't or wouldn't pay, so, it made more sense, for both parties, to discontinue the relationship.

jpvj

100% my thoughts (except from the 45.000 numbers as I have no clue about it).

Previsously a carrier did pay a huge amount of money for the BB setup. At some point it was probably not worth the revenue and the carriers asked BB for marketing funds, etc. to promote their products and BB declined (no money for that).

Now carriers are happy selling other devices where no marketing is required due to customer demand.

masterful

Great article

 Slicing using my 

benson0

It would be nice if they could get a big contract with a Car company to get them positive new

Posted via CB10

BBUK14

A fair assessment of things. I agree that low cost devices are important. I there is a lot of needless hopeless thinking regarding devices in the rest of 2014. I actually think that the Z3 is going to sell well, barring any dumb marketing decisions. Once the BlackBerry is dead scare is finished and it is dying now, the phones will finally start moving.

Join the Cause @ BlackBerry Bootleg Marketing Channel - C003483F4

birdman_38

Dumb marketing decisions have been the bane of BlackBerry the last couple years. The Q3 is their chance to reverse that trend.

tgtallinn

OK, so Z3 doesn't cost much for BlackBerry but what will they gain from it? I assume Foxconn must get the margin as well along with supporting the costs.

Puz_zled

User base for value added services that have yet to be determined,created,revealed.

This post Powered by BlackBerry

yohannyphm

Emerging markets and low cost devices are the way to go until the close down rumors stop scaring away customers on North America and developed countries. If discount Z10 sales on India is the tendency, BlackBerry has a good chance. Stock market drop after the year results on Friday are scary. Seems like stock market don't believe it can be done

Posted on my flagship Z30 10.2.1.2234

bigopti

One of there best hopes is to make some profit on the new hardware sales (Z3, Q20 and BB9900) and at the same time increase profit by more sales from BB World & BBM. Idealistically selling a few million sticker packs goes a long way.

blackmoe

Chen probably realized that their only chance of stopping the erosion of BIS service revenues was to bring the Bold 9900 back. It seems that there was more to it than just filling a gap until the Classic is launched.

Posted via CB10 on my Z30

koboss

It kinda sounds like they are abandoning the north american hand set sales and betting it all on this Z3, they need to get people in north america back into BlackBerry somehow they need a homerun innovation to attack people back and stall the shipjumpers cause theres lots

Posted via CB10

xravishx

I don't think they are abandoning the US market. To me it sounds more like they aren't dumping money into a losing battle and instead putting it where they have a much stronger foothold overseas.

They need to build confidence in the US market and the way that's done right now is by being stable in order to display staying power. The media can only rag on BlackBerry for so long before they realize that maybe they're doing something right and aren't going anywhere.

Pushing their product in the US market too hard is like fighting an avalanche. Sure, they might survive, but then they'll be trapped with very little hope of survival afterward.

Nifty Food BBM Channel C003262E5

IJKBB10

Agreed!!!

 Posted via CB10 on my  Z30

KOman

Great write up Chris! There is definitely a light at the end of this 2014 mile long BlackBerry tunnel...The market volatility may have short interest investors jumping out windows....hmmm, maybe I should invest in windows...stay strong, stay long

Posted via my fancy BB10 pager thingy

CEO-Bruno

If BlackBerry Z3 is going to have living chance to compete, make sure it supports LTE network for places that have them.

I know profits started a downward spiral for BlackBerry when all phone manufacturer shifted from 4g to LTE. BlackBerry 7 was still on 4g.

Let's hope this time the right people are in charge, and future phones like Q20 will have high end features for wireless communication.

Be ready to counter massive negative publicity by media against BlackBerry by building up the brand via marketing, etc ahead of time before new BlackBerry phones are released.

BlackBerry Lead

Do Not Follow

Posted via CB10

TheStoryUp

Chen had confirmed there will be a LTE Z3, but the release date is not set I don't think.

Zed30

jmose

I'm sure this has been discussed before, but it has left my brain. Who at BB decided to turn off the cash spigot of BIS customers with BB10, and why did they choose to do that? Why not build that same architecture into BB10?

If they had done that, the embarrassing 'how many BB7 devices is BB still selling' question wouldn't matter, and all the millions(?) of new BB10 consumer devices could have better contributed to BB's cash flow.

Jim

birdman_38

Because carriers need to pay BlackBerry for BIS licences. When BlackBerry handhelds were in high demand they didn't mind. Now, not so much.

canadian nick

That's true but in the end it's the customers that pay for BIS. I would be willing to pay you extra for the option.

Posted via CB10

millerliteboy

You would pay more... Would It Be Required plan/feature ? If so would most customers pay extra, would carriers want the extra plan/feature?

Dave79

They could have made the service optional, and made it available to subscribe from BlackBerry world without carrier intervention.

birdman_38

BIS Direct? Interesting.

Complicated, but interesting.

NotGoodIMO

May be make this a cross platform feature, just like BBM. Any one looking for security, data compression (less data usage), real time email etc will use this technology.

BBZ10wannabe

Part of the problem I'm told is related to data compression. BB10 doesn't do data compression like the BB 7 devices because of the abundance of rich graphics and webpages etc. that need to be moved quickly to make for the best user experience. BIS data compression had to be sacrificed. The other part I think is that BBRY due to it's declining market share is losing clout with the carriers. The carriers are pushing back (requesting price cuts etc..) and since BBRY doesn't control the market like they once used to, BBRY will make less money in the future from BIS even if they keep it going. The model is a dying one.

NotGoodIMO

Who else other than dumb a$$ TH and his lineup of monkeys at the top? As a BB fan it's embarrassing to see how the management ruined this company.

awesome51

Hope they pull It together!!

Posted via CB10

John Kastanes

2014 is the transition year. 2015 will be the year of profitability. If you are going to invest, now is the time!

Z10

NotGoodIMO

It's all about the management and Blackberry seems to have a good management now.

nt300

Thanks Chris,

Lets estimate where BlackBerry would be today had Thorsten Heins remained as CEO. I can only go by the past performance. Need I say more...

No disrespect to Thorsten Heins, because he did to a great job with BB10 for example.

On a side note, had BlackBerry made BES10 100% compatible with BBOS, we wouldn't be talking about this right now, because in my estimate, BBRY, even before the BB10 launch event would have had well over double the amount of BES10 installations. Approx: 60-80+ to be precise.

Posted via CB10

rickster2611

you can always rely on Chris Umiastowski to tell exactly as it is .

BlackBerry needs to have a portfolio of devices in the market place.

A BB10 tablet is missing.

Consumer always compare Operating Systems. They always check to see if they have the following : a budget device, a high end device and a tablet.

BlackBerry might have to outsource the marketing for all future devices.

They have to change the perception very ASAP.

If the 9900 does come back it has to be an improved version .

On another note there is an interesting article in the Independent newspaper (uk) about some dodgy practices among certain Tech companies with regards to competition.

I always suspect something like this was going on.

Posted via CB10

Rolf Hed

This is sounding rough--maybe 2014 will be a "make-or-break year," a key turning point. It sounds like the main hope is lots of BES revenue, better margins (both on BBOS7 and BB10 devices), and BIS revenue from BBOS7 plans and continuing sales of the devices with those plans. It seems like BlackBerry *has* to find a way to stop the declining sales. (Sales for devices on both OSes have been declining over the last year, haven't they? Someone correct me if I'm wrong.)

Not impossible, but a lot of things are going to have to go right from here on out... :-/

xBURK

Thanks Chris, makes a lot of sense.

2014 for BlackBerry is very uneventful to some. I actually like watching how Mr. Chen directs the company. This has the makings of possibly being one of the biggest come backs in the history of tech. Of course it's wishful thinking on my part, but it can be done. I definitely want to see how it happens if this is the case.

Powered by BlackBerry

birdman_38

It's not gonna happen by cutting ties with carriers thereby upsetting the enterprise segment.

oliwer

I wonder how they will sell bes10 or bes12 licenses when they are giving them away for free (EZ Pass) including the T-Support.
Don't expect an increasing number there - the numbers will increase somewhere in the middle of the 2015.
They will still burn a lot of cash until then, but with the current EZ Pass Programm and BES12 they lay down the foundation of being and staying strong in the business.

Posted via CB10

dildothegreat

I'll help BlackBerry by free advertising my handset to my friends and family. it's a good and productive OS, better than anything out there... I'll post every now and then on my facebook and twitter page everything just to prove that BlackBerry is still fighting thus a user like me should somehow fight with BlackBerry too. its a quality brand that were going to miss if not done right!!!

Loading..

W Hoa

Come the third quarter BBRY will no longer have to fork out 800 million a year in licensing fees.

And then we have stickers. Laughable? Maybe not. Viber last fall introduced stickers. Viber has 100 million 'active' users. In the first three months of offering stickers over 100 million sticker packs were downloaded.

http://www.techinasia.com/rakuten-acquisition-reveals-viber-has-100-mill...

ggastaris

Doesn't mean they bought anything. Downloaded means downloaded

Posted via CB10

W Hoa

I'm going to go out on a limb here and suggest that a few of those 100 million downloads were purchased, wouldn't ya think?

LINE said in Q1 this year that it makes more than £10m from stickers each quarter...but hey, not being a public and regulated company they could be making it up.

ANTIABE

Commercial,commercial,commercial. În whole world!

Posted via CB10

jay64

The T-Mobile thing is a pissing contest between two CEO's. The part of the offer that never seems to get reported is that if you traded up to maybe a Q10 from your old BB, you got the 200 credit AND an additional 50 bucks on top of that. The problem was virtually no customers wanted to trade up to another BB and that's what really got Chen's cheese moving. Rather then go after customers for dismal sales he went after the other CEO. Smart but with no practical effect. The next few quarters will not be full of write downs, zero margin phones, tax breaks or property sales, so that will tell the story.

ggastaris

The fact that they release it yearly and make you re-analyze quarterly is deceptive behavior. It means you don't really know because you did the analyzing and not BlackBerry

Posted via CB10

hankster1988

Chris, really appreciate how you conduct your analysis. Fair and practical. No hype. Just the facts and a reasonable analysis with some personal thoughts. Excellent job!

Posted via CB10 using the awesome Z30

G-bone

Thanks, Chris. I remain optimistic. Mr. Chen is a smart man and Prem is not known for failure.

#IchooseBlackBerry10

Posted via CB10

BBistherealthing

Good writing Chris. If they annonces a e-commerce deal with Amazon, that alone could save BlackBerry. Amazon is known to make aggressive offers and get customers on board.

jpvj

Thx. Chris.
I agree. I doubt BlackBerry will be able to sustain revenue while cutting costs. They desperately need other revenue streams, BBM seems to be one attempt.

BES12 will NOT save them right now. NO serious CTO will implement a totally new MDM solution (BES 12 is heavily rewritten) before long testing or good reviews in the market. It will take time.

Nicholas Kathrein

I wonder.. I mean BB phones are either way to expensive or for a very low price as if they aren't selling. I saw today Chen pulled out of T-Mobile USA. To make money on hardware people have to want your product and the more they want it the more profit you can make since people will pay more for it. (USA perspective) > I don't see the want for the devices which means they can't make profit on these devices. Maybe in other countries that is different. As far as BIS I think BB is to late on that product. There are many companies established now in this space. I think BB is a year too late. Sorry it seems so down but that's what happens in tech. #1 today and gone tomorrow.

Qurve

I'm having more and more doubts about Chen's real plans.

birdman_38

Nobody knows his real plans.

StoicEngineer

Chris,

"... if they execute well.". You summarised the future of BlackBerry in four words. It's now a race to build a new continuing revenue stream before the money runs out.

John Chen knows this, of course. I liked his low key acknowledgement of the loss of BIS revenue because it showed his recognition of the fact without useless regret.

For me, the question is can BlackBerry devise another subscription-based plan to replace the BIS revenue? I suspect "Stickers" isn't it.

Posted via CB10

axllebeer

Really, only time will tell. It could go any way at this point but I still think that they can do it.

Posted from my Tab 3 via Android CrackBerry App!

Otech#CB

Let's go BB! Good job Chris

Posted via CB10

CrispyOz

BlackBerry no longer has the clout with carriers to encourage them to provide BIS? That is a very US-Centric view, try going to some Asian countries like Indonesia which is one of BlackBerry's biggest successes. Thorsten really screwed up with BB10, if it had low cost devices and supported BIS that carriers all have the infrastructure and the consumers all have the loyalty. Now they are all buying cheap hemeroid devices because BlackBerry is too expensive.

Posted via CB10

jeffserver

they should make ads or something or have some reviews made of their phone an OS! there is so much you can do with BB10 and I never heard of them until I got my phone in my hand. Promote your product would be the key to achieve more profit out of their phones.

Posted via CB10

JonCBK

I wonder if the subscribers will get more sticky as they dwindle. The concentration has to have more diehards as a percentage as the total numbers decrease. But maybe diehards are too small a percentage to make a difference. And this is fighting with the aging handsets that get older every quarter. Than could influence acceleration of this loss.

Posted via CB10