BBRY Earnings: Priv major drag, raises questions about future of phone business
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- 04-01-16 06:48 AMLike 15
- Does not surprise me at all, when you don't advertise the product and price it higher then your competition, this can be expected. I still say they should have priced it at 569.00 US and it would have attracted a bigger audience, but I am not the one with the fancy marketing degrees making the decisions in those corporate offices up there in Waterloo.
They've instead chosen to sell a small number of phones to their diehard fanbase and enterprise customers at a high price to keep some revenue coming in while they move to software. Keep in mind this hardware revenue is still a very significant 40% of their total.04-01-16 07:00 AMLike 11 -
BlackBerry 10, Passport signed.George Boudouris and Jamin Bob like this.04-01-16 07:21 AMLike 2 - But if you price it at $569 and also spend money on advertising, then you can't make money on the phone at all. BBRY doesn't have the scale that Samsung and Apple do. Rock, meet hard place.
They've instead chosen to sell a small number of phones to their diehard fanbase and enterprise customers at a high price to keep some revenue coming in while they move to software. Keep in mind this hardware revenue is still a very significant 40% of their total.04-01-16 07:22 AMLike 4 - If you sell 600K units per quarter, even if you allocate $25 per unit for advertising, that's a $15 million ad campaign which is hardly anything. Most smartphone ad campaigns that you would remember are $100 million or more.04-01-16 07:38 AMLike 3
- Chief Executive John Chen told analysts that smartphone sales were below company expectations. This was partly due to delays in contract negotiations with carriers, including Verizon, about its Android-based Priv device, he said.04-01-16 08:10 AMLike 0
- 04-01-16 08:12 AMLike 2
- They said hardware is profitable and that it is approx 40% of their revenue. I don't see hardware going anywhere until it falls to like 15% revenue and even only then if it is no longer profitable. Even if it falls to 1% yet stays profitable, what would be the reason to get rid of it?
Posted via the CrackBerry App for Androidluc4625 likes this.04-01-16 08:14 AMLike 1 - They said hardware is profitable and that it is approx 40% of their revenue. I don't see hardware going anywhere until it falls to like 15% revenue and even only then if it is no longer profitable. Even if it falls to 1% yet stays profitable, what would be the reason to get rid of it?
Chen said that they need to sell 3M devices to break even in FY2017 if ASP remains around $300. However, he said he's also considering reducing the price on the Priv, and in that case the break even point would obviously rise above that 3M mark.
He thinks they have a shot at breaking even in hardware, but he reiterated that if that does not happen he will shut it down.04-01-16 08:18 AMLike 3 - How? Every earnings report its the same thing. Well it was only on this carrier or that carrier and it will pick up now that it's on this carrier. You can't sell what people don't know exists.qwerty4ever and andy957 like this.04-01-16 08:26 AMLike 2
- Does not surprise me at all, when you don't advertise the product and price it higher then your competition, this can be expected. I still say they should have priced it at 569.00 US and it would have attracted a bigger audience, but I am not the one with the fancy marketing degrees making the decisions in those corporate offices up there in Waterloo.04-01-16 08:27 AMLike 0
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Posted via CB1004-01-16 08:28 AMLike 4 - According to the article: they sold 31% less handsets in Q4/16 than they did in Q4/15. In Q4/15 Chen said they moved 1.6M handsets and saw revenue from 1.3M of them. Without doing any math you can intuit they moved more handsets this quarter than they did in Q3/16. So the trend went up, not down.
Also mentioned in the article is Chen's road map for handsets; making them profitable one year from now. This falls in line with what Chen said in interview after the Q3/16 call about the PRIV continuing into 2017 at a reduced price and the rumors of two more handsets being released later in 2016.
We all know that Chen and high hopes for the PRIV, perhaps even unrealistic hopes. Yet just because sales did not reach his hopes does not mean that sales totally sucked, either.
The sky is not falling.
Posted via CB PRIV.04-01-16 08:48 AMLike 3 - According to the article: they sold 31% less handsets in Q4/16 than they did in Q4/15. In Q4/15 Chen said they moved 1.6M handsets and saw revenue from 1.3M of them. Without doing any math you can intuit they moved more handsets this quarter than they did in Q3/16. So the trend went up, not down.
Also mentioned in the article is Chen's road map for handsets; making them profitable one year from now. This falls in line with what Chen said in interview after the Q3/16 call about the PRIV continuing into 2017 at a reduced price and the rumors of two more handsets being released later in 2016.
We all know that Chen and high hopes for the PRIV, perhaps even unrealistic hopes. Yet just because sales did not reach his hopes does not mean that sales totally sucked, either.
The sky is not falling.
Posted via CB PRIV.04-01-16 08:58 AMLike 0 - According to the article: they sold 31% less handsets in Q4/16 than they did in Q4/15. In Q4/15 Chen said they moved 1.6M handsets and saw revenue from 1.3M of them. Without doing any math you can intuit they moved more handsets this quarter than they did in Q3/16. So the trend went up, not down.
Also mentioned in the article is Chen's road map for handsets; making them profitable one year from now. This falls in line with what Chen said in interview after the Q3/16 call about the PRIV continuing into 2017 at a reduced price and the rumors of two more handsets being released later in 2016.
We all know that Chen and high hopes for the PRIV, perhaps even unrealistic hopes. Yet just because sales did not reach his hopes does not mean that sales totally sucked, either.
The sky is not falling.
Posted via CB PRIV.04-01-16 09:08 AMLike 2 - I honestly doubt it. Verizon might be the biggest carrier in the US, but that still is just one carrier in one market. This release won't make Priv sales skyrocket, especially considering this phone is already nearing the six months threshold, with new generation phones like Galaxy S7 or LG G5 either available or just around the corner.
There also still is the price situation, IMHO the Priv has been priced too high at the beginning and the situation didn't get better, it got worse. Right now in Germany a Samsung Galaxy S7 costs almost 40 bucks less than a Priv. The S7 Edge is about 80 bucks more. The G5 hasn't been released yet, but you can already preorder it for less than a Priv. Don't even consider looking at deals for last year's phones like S6, G4, Z5 or the X Style - those offer considerably better deals than the Priv.
BlackBerry hasn't adjusted the price, at least traditional consumers who got originally interested in the Priv might think twice now once they compare pricing.04-01-16 09:49 AMLike 5 - John Chen on CNBC now, I will paraphrase, but he said by September if he cannot see a clear window into hardware profitability, he will move to being a software company only. It caused the interviewer to give a "ok, wow".04-01-16 09:54 AMLike 0
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I was going by the linked article only. I took "hardware sales" to mean units shipped but not necessarily sold. However, if hardware revenue only dropped by 31% considering at most 1M less sales, that's still not too shabby, is it?
Posted via CB PRIV.04-01-16 10:07 AMLike 0 -
They could, they could, they could... but they didn't. Hardware won't save itself in a miracle way.04-01-16 10:12 AMLike 2 - I honestly doubt it. Verizon might be the biggest carrier in the US, but that still is just one carrier in one market. This release won't make Priv sales skyrocket, especially considering this phone is already nearing the six months threshold, with new generation phones like Galaxy S7 or LG G5 either available or just around the corner.
There also still is the price situation, IMHO the Priv has been priced too high at the beginning and the situation didn't get better, it got worse. Right now in Germany a Samsung Galaxy S7 costs almost 40 bucks less than a Priv. The S7 Edge is about 80 bucks more. The G5 hasn't been released yet, but you can already preorder it for less than a Priv. Don't even consider looking at deals for last year's phones like S6, G4, Z5 or the X Style - those offer considerably better deals than the Priv.
BlackBerry hasn't adjusted the price, at least traditional consumers who got originally interested in the Priv might think twice now once they compare pricing.
So, I got my PRIV for $520, not $720.
For what it worth, with only 56 reviews on Verizon 's website it has a near perfect 5 Star rating.
Posted via CB PRIV.shoaib2811 and rickkel like this.04-01-16 10:17 AMLike 2 - If he *really* wants to get traction for the hardware business, he needs a better plan for future projects. IMHO the Priv could've done *much* better than it did. The negative aspects in terms of build quality could've been easily avoided if they wanted to. The press loved or at least liked the phone, major critical points always have been build quality and price. They could've priced it more agressively. Also they could have started better marketing.
They could, they could, they could... but they didn't. Hardware won't save itself in a miracle way.
1) A lack of desire to turn around the hardware business, from which end product is a device like Priv
2) A lack of remaining resources to turn around the hardware business, from which end product is a device like Priv
Posted via the CrackBerry App for Android04-01-16 10:18 AMLike 0
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BBRY Earnings: Priv major drag, raises questions about future of phone business
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