[kcdist]

As reported in the Q3 2010 financial report, Blackberry produced (or reported as shipped) 10.1 Million phones. As I recall, they had a factory in Europe, the Mexican factory and a smaller one in Canada. For the purpose of this calculation, I'll assume there were two other factories, for a total of 5.

Let's assume each factory produced 2,000,000 phones per quarter, or approximately 20,000 phones per day based on 7 day per week production.

Therefore, I believe it would be a safe assumption that the single Mexican factory that produces all non z3 phones, can now manufacture at least 12,000 phones per day - about 60% of previous peak production.

Further, assuming that Passport production comprises of 70% new phone production, I peg the production at about 8,000 new passports per day. I believe that the Classic was likely delayed due to the requirement to produce greater than expected numbers of Passports.

The Passport was released for sale on 24 September, and all pre-manufactured stock sold out immediately. As Amazon and ShopBlackberry have not yet been resupplied with a stable, reliable stock of Passports, I assume carrier's are BlackBerry's first priority for new stock sales.

I am therefore assuming that only once Amazon/ShopBlackberry have been fully resupplied, can we assume that sales have slowed down, and equilibrium has been restored. Until then, I assume that 100% of Passports being produced can be considered as sold, and that, until we see steady stock at Amazon/ShopBlackberry, that the Mexican factory will continue to produce at full capacity of 8,000 per day.

Now the math:

For the quarter ending November 2014, I am assuming the following sales of the Passport:

68 Days production @ 8,000 units per day, PLUS the original 200,000 units, for a total of 744,000 Passports sold in Q3 2015.

With an average selling price of $500 USD, the Passport should account for $372 Million in Gross Revenue.

Last Quarter's Gross Revenue was $916 Million.

THEREFORE - Assume a 5% drop in Revenue from Q2 - from $916 to $879 Million. Then add the new revenue derived from Passport sales: $879+$372 = $1,251 Million.

The highest Q3 Revenue estimate I could find on the internet was $988 Million (Bloomberg).

Therefore, I am forecasting a Revenue beat of 26%, based on the unexpected strong sales of the Passport.

Comments on my assumptions/calculations?

***I bought back into BBRY today, and I'm trying to make myself feel better about my decision***

[theRock1975]

It's hard to accept these assumptions based on factory output in 2010.
You're also assuming production rate hasn't changed since the first sellout.

Some people have mentioned that Passport output was initially 20,000/day on a 5-day/week cycle.

But it's true the passport can make a great q3. 1 million Passport is $600M+ and the company has gross revenue of $960M on all lines of businesses for a quarter!

I'm confident we'll have a positive EPS.

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[kcdist]

Well, I guess that's good....you're suggesting my numbers are too conservative?

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[sentimentGX4]

There are so many assumptions in your math impossible to validate, especially considering the Passport has only been available for a little more than a month. Your post would probably make a great Seeking Alpha article, though.

[theRock1975]

Well, I guess that's good....you're suggesting my numbers are too conservative?

Posted via CB10

I have no clue what production is but it's been 5 weeks and still no stock?!? I don't see why Blackberry wouldn't increase production by now. There was a recent Indonesian launch and there's an upcoming US launch. They gotta fill those channels too.

It'll be a stellar quarter if Passports are still unavailable by the end of the month.

Posted via CB10

[world traveler and former ceo]

Huge unfulfilled Passport demand in india also ...

[world traveler and former ceo]

Also Shopblackberry.com us and canada sites now have super discounted Q10,Z10,Z30 Q5 BlackBerry phones unlocked for sale November ONLY... awesome deals...


Next quarter should be pleasant surprise...



Posted via CB10

[Prem WatsApp]

Also Shopblackberry.com us and canada sites now have super discounted Q10,Z10,Z30 Q5 BlackBerry phones unlocked for sale November ONLY... awesome deals...


Next quarter should be pleasant surprise...



Posted via CB10

Looks like they want to make (us) users happy, and offer an alternative, so users can still buy a BB10 phone, albeit a last gen model at a greatly reduced price to make up for (the frustration of) Passport unavailability...

If that makes sense :-))

? ? ? Passposted via CB Chen ? ? ?

[howarmat]

i was thinking they were making about 50k a week but after seeing such little numbers show up when shop BB comes back in stock makes me think its less. When it appears in stock it seems less than 100 available. where are then other thousands going then? Also getting orders for the screens might be tough and very expensive. All details that will come out in 2 months. I estimate they will sell 400-500k end of quarter

[early2bed]

Let's assume each factory produced 2,000,000 phones per quarter, or approximately 20,000 phones per day based on 7 day per week production.

Unless there is a shortage of any component. Then production will stop. Some companies invest hundreds of millions of dollars to buy up future production to ensure their supply of components.

[b121]

We all hope they sell a lot, but I'm expecting more conservative numbers. Regardless of how many the factory can produce per day, it would have booked that capacity to other customers. Therefore, it could have been producing no passports for several weeks.

EDIT: the point about available components is a good one too

It's great the demand exceeded supply, but not sure we can estimate the units without a lot more information (but I like the attempt... I've done the same ).

btw, I think I read the classic is being produced by Foxconn, so won't impact the passport supply.

Posted via CB10 (7250 -> 8703e -> 9530 -> 9550 -> 9650 -> 9930 -> PlayBook -> Z10 -> Z30)

[app_Developer]

i was thinking they were making about 50k a week but after seeing such little numbers show up when shop BB comes back in stock makes me think its less. When it appears in stock it seems less than 100 available. where are then other thousands going then? Also getting orders for the screens might be tough and very expensive. All details that will come out in 2 months. I estimate they will sell 400-500k end of quarter

I think you hit on the absolute key there. Those screens cannot be easy to get. I doubt the phone is even in steady weekly production at all. I think they bought (and paid for) X number of screens, and that's all they have until they receive the next screen batch.

The trickles we see are likely just a handful of units that you would see still moving around the channels from the original 200k.

If they were in steady weekly production they could very easily sell phones every day with delivery quoted in N to N' business days, like Apple does. I think they aren't doing that because they don't have a steady stream of those screens coming in.


Sent from my iPhone 6 using Tapatalk

[digitalsurfboard]

OP way too many assumptions. you conclude a 26% revenue beat? i'd love to be wrong, but that's pie in the sky.

i think above 500k passports sold in the quarter would be seen as very successful. probably not by crackberry because somehow people have come to expect upto 1 million units sold.

the big question is how many 9900s they had left in stock (they said they weren't going to produce anymore) and how well are they moving? there were a lot of bbos phones sold last quarter. are those numbers sustainable? and will the decline be offset by bb10 phones?

will the rate of z3 sales increase to compensate for lower bbos sales?

is the current positive media coverage going to rub off and translate into z10/30, q5/10 sales?

how much are passport sales cannibalizing other bb10 sales?

how is their service revenue going to affected? everyone's getting bes10 for free right now. BIS revenue is declining.

it's going to be tight until EZ pass starts paying off. Blackberry needs another quarter of increasingly positive coverage to win back mind share.

[b121]

I think you hit on the absolute key there. Those screens cannot be easy to get. I doubt the phone is even in steady weekly production at all. I think they bought (and paid for) X number of screens, and that's all they have until they receive the next screen batch.

The trickles we see are likely just a handful of units that you would see still moving around the channels from the original 200k.

Agreed. We also don't know what the economic order quantities are... do they need to produce in lots of 25,000, 100,000, 200,000. Perhaps someone on this forum is in the industry and can provide some insight?

Posted via CB10 (7250 -> 8703e -> 9530 -> 9550 -> 9650 -> 9930 -> PlayBook -> Z10 -> Z30)

[world traveler and former ceo]

i was thinking they were making about 50k a week but after seeing such little numbers show up when shop BB comes back in stock makes me think its less. When it appears in stock it seems less than 100 available. where are then other thousands going then? Also getting orders for the screens might be tough and very expensive. All details that will come out in 2 months. I estimate they will sell 400-500k end of quarter

Thought I read a while back through a source that had a contact at the Mexican plant where the Passport is produced that they were on their third set of 200,000 Passports.. I expect well north of 600,000 sold for the period ending end of November... we'll see....

Posted via CB10

[howarmat]

Thought I read a while back through a source that had a contact at the Mexican plant where the Passport is produced that they were on their third set of 200,000 Passports.. I expect well north of 600,000 sold for the period ending end of November... we'll see....

Posted via CB10

find that link then.That would be great to hear. I juest think that if they had that many they wouldnt be in shortage for them. Demand isnt that much

[insandouts]

i was thinking they were making about 50k a week but after seeing such little numbers show up when shop BB comes back in stock makes me think its less. When it appears in stock it seems less than 100 available. where are then other thousands going then? Also getting orders for the screens might be tough and very expensive. All details that will come out in 2 months. I estimate they will sell 400-500k end of quarter

People assumed that they actually had 200K on hand at launch, I assume not. Getting 200K orders is far different than having 200K on hand. I think that the actual number on hand was much less and that explain why a good chunk of orders are still undelivered.

[THBW]

find that link then. If they had that many they wouldnt be in shortage for them. Demand isnt that much

Howarmat, no one really knows the true sale numbers. Is 600k reasonable for this quarter? Sure, Chen already confirmed sales of 200K in the first 12 hours. They have restocked 3 times (early, mid and Late October) plus BlackBerry has already stuffed the retail channels. So I don't think it is out of ball park. My only concern is a materials shortage and whether this is creating a false sense of demand. TBH, I don't think that is the case at the moment


Posted via CB10

[world traveler and former ceo]

600-800k for the quarter would be my guess....

Posted via CB10

[Coffee Addict]

I was trying to figure out this exact same question for past 1 week. I firmly guess that current stock shortages are due to lack of components.

My guess for Passport sales would be around 350k units at the best.

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[app_Developer]

I was trying to figure out this exact same question for past 1 week. I firmly guess that current stock shortages are due to lack of components.

My guess for Passport sales would be around 350k units at the best.

I agree. They could not have committed to a large number of screens before launch (too large of a financial risk before validating demand). After launch, it's not possible to just turn around and go to some magic screen fab and walk away with such an unusual screen on demand.

I think the best case is that BlackBerry has now sized the passport demand and is negotiating a larger (higher risk) screen purchase for a broader launch. That probably takes significant lead time, on the order of months not weeks.


Sent from my iPhone 6 using Tapatalk

[theRock1975]

I was trying to figure out this exact same question for past 1 week. I firmly guess that current stock shortages are due to lack of components.

My guess for Passport sales would be around 350k units at the best.

Posted via CB10

The Passport was 2 years in the making. Really, 350k in its launching quarter?

Say it launches in 10 countries, you're saying Blackberry planned on average 35,000 for India, Canada, Dubai, Indonesia, UK, ...

200,000 was confirmed in the first 12 hours when pre-orders were stopped and they only planned another 150k in the following 8 weeks?

350k doesn't make any sense.




Posted via CB10

[THBW]

Hardware makers do production runs and the only way to keep costs down per unit, is to make them in volume. I can certainly tell you it's not a few hundred per week. One of the previous posters alluded to this issue and I would suggest starting there. As noted previously, it is pretty clearly we past 200-250 K in sales a month ago. Could sales hit 600K, sure it's possible but we need to know more about the size of the product runs and what the initial order size was. As noted in my previous statement, there is concern in the analyst community of a hardware shortage and that this maybe impinging on BlackBerry's ability to match supply and demand.

Posted via CB10

[THBW]

Just to add, if there is a hardware shortage, then actual sales will be impacted. Also I believe that BlackBerry's quarter ends at the end of November, so one will only see two months of passport sales. Consequently, a number of 400-450 K would be more realistic given the launch date.

Posted via CB10

[Coffee Addict]

The Passport was 2 years in the making. Really, 350k in its launching quarter?

Say it launches in 10 countries, you're saying Blackberry planned on average 35,000 for India, Canada, Dubai, Indonesia, UK, ...

200,000 was confirmed in the first 12 hours when pre-orders were stopped and they only planned another 150k in the following 8 weeks?

350k doesn't make any sense.




Posted via CB10

I have gone through import data for India specifically. Total number of Passport units which have come into India until end of October is a little less than 3000 units. And they have been sold out. This number includes both BlackBerry distribution channels and other retailers importing it on their own.

Extrapolate this number to all markets and 200k pre orders. Shipments of over 350000 units look very optimistic. I would love to be wrong though.

Posted via CB10