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I agree, however the big news of the night is the service revenue. I dont see this as a bad thing actually. To me it shows that RIM and the carriers are reaching agreements on hardware, where the hardware itself will be profitable enough to offset the service revenue cost. Assuming RIM sells devices above their cost, they only need to sell it ~$70-220 over to break even across a two/three year contract.
Originally Posted by howarmat
Let me explain:
Service revenue -
$3-6 / mo for 2 - 3 years (depending on country).
Total service revenue per user = $72-216
Hardware cost -
Assuming it costs roughly the same to make a BB10 device has it does an iPhone 5, RIM is looking at about $200 in hardware cost.
Add in other factors and lets make that an even $250.
IF RIM can sell the devices for the estimated cost of $400-450, they can break even on total revenue while still offsetting the service revenue decline. AND, if they are heavily loaded on the prosumer/consumer side of things, they will actually turn a hefty overall profit (consumer contracts on the low end of the $72-216 range, somewhere around $100-150 I would guess) per device/user. Much more so than they have with their current service revenue market.
Also keep in mind RIM will be expanding their MDM piece, and their technical support services to go along with it. CALs and TSupport are virtually 100% profit. With 200,000 BES installed worldwide, they hold a large group of customers that they could turn into BB10 or BES10 customers.
Service revenue estimates taken from Chris' article here: http://crackberry.com/research-motio...roller-coaster
ASP estimate taken from Chris' article here: http://crackberry.com/blackberry-10-hardware-back-black