[eyesopen1111]

Chen was just interviewed by Bloomberg and was asked about BlackBerry's handset business starting at 4:50 seconds into the video at this link:

BlackBerry Revenue to Begin Growing in a Year, Chen Says - Bloomberg Business

Chen was asked about BlackBerry handsets and admitted that: "Our gross margins are positive, but we�re still losing money on it."

Chen claims that BlackBerry will stay in the handset business because he believes that it will eventually make money, but does Crackberry trust Chen to stay in the handset business or to abandon it?

We should keep in mind that the only new BlackBerry handset that will be available for most of 2015 will be the BlackBerry Leap. Why? Because though Chen said the Slider "should" be out by the end of the year, this prediction, even if true, would not leave very much time at all for the Slider to contribute very much at all to the handsets� 2015 revenue.

So, Crackberry, will Chen stay or stray from handsets? What do you think? I say Chen and BlackBerry are out of handsets by 2016. Am I wrong?

[thymaster]

I heard BlackBerry is going out of business since 2011 and they are still alive and kicking in 2015.

People have predicted Samsung would buy BlackBerry and with 3 publicity attempts BlackBerry is still a company on it's own.

[Ment]

BB will stay in handsets as long as an end-to-end solution is needed for enterprise. Even if its a minor loss leader they'll stay in but you may see a reduction in models available. Its possible down the road you could see only a Classic derivative and a mid and high range Slider. With the Slider serving dual roles as for pkb/vkb users.

[eyesopen1111]

I heard BlackBerry is going out of business since 2011 and they are still alive and kicking in 2015.

People have predicted Samsung would buy BlackBerry and with 3 publicity attempts BlackBerry is still a company on it's own.

Huh? This thread is about BlackBerry's HANDSET business, not BlackBerry overall. Do you think BlackBerry will continue to make smartphones or not?

BB will stay in handsets as long as an end-to-end solution is needed for enterprise. Even if its a minor loss leader they'll stay in but you may see a reduction in models available. Its possible down the road you could see only a Classic derivative and a mid and high range Slider. With the Slider serving dual roles as for pkb/vkb users.

Since the Slider only "should" be launched this year, as a practical matter, the only new BlackBerry handset in 2015 will be the Leap. As a result, we are already at the stage where a "reduction in models" is at a near minimum. Like you, I think that Chen is trying to lessen the loss in handsets. But this is not a BlackBerry comeback plan, is it?

[Ment]

Since the Slider only "should" be launched this year, as a practical matter, the only new BlackBerry handset in 2015 will be the Leap. As a result, we are already at the stage where a "reduction in models" is at a near minimum. Like you, I think that Chen is trying to lessen the loss in handsets. But this is not a BlackBerry comeback plan, is it?

Not a comeback in handsets. Where it used to be handsets>services>software>QNX , in 5 years it could be QNX,software,handsets in terms of revenue. Handsets will still exist in a supporting role rather than primary.

[SunshineStateFlyer]

Too difficult to predict at this time. In the near future, maybe the next 2-3 years, I don't see BlackBerry abandoning the handset market. However, at some point, the turnaround has to be made.

The current market situation is difficult, with Android and iOS gaining ever more dominance, even in corporate environments, while the app situation is being very unsatisfactory on BB10.

I don't want to be too pessimistic but I'd say that if we don't see a massive improvement within the next 5 years there is a realistic chance of BlackBerry disappearing from the market with their own handsets and OS.


Posted via CB10

[keithhackneysmullet]

I think BlackBerry will give one last hail Mary on handsets and it will be a full on Google play certified android. If that phone isn't successful then they will dump the handset division. Android is their last ace in the hole.

Posted via CB10

[Troy Tiscareno]

Chen was asked about BlackBerry handsets and admitted that: "Our gross margins are positive, but we�re still losing money on it."

A number of CB folks have been saying "handsets are profitable" because they don't understand the difference between gross margins and profits. I've been saying that BB is still losing money on handsets, and now Chen has confirmed it himself.

IMO, Chen has to make a show of appearing to be in the handset business until at least 2016, to give the software division enough time to grow. QNX is never going to be the cash cow - they've already grown QNX revenues several hundred percent (which is excellent!), and it's still less than $200M a year - that's nothing for a company like BB. The "software" that BB is looking to grow is BES, the Productivity Suites, and other cross-platform software. It's going to take time to do that, and so the handset division needs to stick around until them, but once software revenues look like they're heading in the right direction, I think Chen will cut the cord on the handsets.

Is there "proof"? Of course not - that would cause BB's handset sales to crash, quickly followed by the stock price. When handsets are cut, it will be done more-or-less in secret, after most inventory has been sold to retailers, and BB will let that inventory run down before making the announcement that their "planned future devices" are being canceled and they are exiting the hardware business.

So, why do I believe this will happen? Because there is a ton of other evidence that, when added together, points to this conclusion. First and foremost, sales continue to drop. Second, production of new models has continued to slow, with likely only 1 or 2 models released in 2015. Third, the continued downsizing of the company, with cuts continuing to be made in the handset/hardware division. Fourth, the lack of advertising even with obviously-consumer products like the Leap, which is an answer to a question no one was asking. And fifth, every decision Chen has made has been consistent with this theory, even his statements that "we have no plans to leave hardware right now", which really means nothing, especially when he previously stated that "we'll keep making handsets as long as they're profitable" and now admits that they aren't.

I would expect the announcement sometime in mid-2016-early 2017, based on what I know today.

[Tatwi]

Without BlackBerry in the market at all, Motorola, LG, and Samsung might make some Android keyboard/slider devices again. It's not like there aren't a plethora of "traditional BlackBerry style" devices out there that clearly did not infringe on RIM's patents. So without BlackBerry in the handset business there *might* be enough of a niche to justify the other manufacturers making some keyboard devices.

[Randal Yandal]

If chen really wanted BlackBerry handsets to do well he would be offering a all touch device. The fact is. Its the number of people alone who would upgrade from z3,z10,z30 would be at least 2-3mill.

No All Touch phone, no more of my money. Simple.


Z30 (10.3.1)

[ubizmo]

Personally, it was the "BlackBerry Experience" announcement that persuaded me that Chen intends to pull the plug on handsets before very long. At the moment, the BB10 UX is the only that differentiates BlackBerry to the non-BES user. When you make the move to sell BES and the BB10 UX on other platforms, it's a pretty clear signal that the home platform is on borrowed time.

[Troy Tiscareno]

Personally, it was the "BlackBerry Experience" announcement that persuaded me that Chen intends to pull the plug on handsets before very long. At the moment, the BB10 UX is the only that differentiates BlackBerry to the non-BES user. When you make the move to sell BES and the BB10 UX on other platforms, it's a pretty clear signal that the home platform is on borrowed time.

Yes, but that's just one in a very, very long line of decisions that point to the end of BB smartphones. Note that everything else from BB has been moving cross-platform, and that they've been getting rid of BB-handset-specific pieces for a while, including just recently the former TAT/BB Sweden. Formerly announcing that they'd effectively given up with native development and encouraged developers to develop on the Android platform was another big one. Not making a flagship all-touch, when 98+% of the market for flagships is all-touch, is another - and this isn't a recent development.

Chen isn't stupid, and neither are the other folks who work for BB. Their decisions seem stupid if you assume that hardware will be here forever, but they make a ton more sense if you assume that they won't.

[anon(8865116)]

A number of CB folks have been saying "handsets are profitable" because they don't understand the difference between gross margins and profits. I've been saying that BB is still losing money on handsets, and now Chen has confirmed it himself.

IMO, Chen has to make a show of appearing to be in the handset business until at least 2016, to give the software division enough time to grow. QNX is never going to be the cash cow - they've already grown QNX revenues several hundred percent (which is excellent!), and it's still less than $200M a year - that's nothing for a company like BB. The "software" that BB is looking to grow is BES, the Productivity Suites, and other cross-platform software. It's going to take time to do that, and so the handset division needs to stick around until them, but once software revenues look like they're heading in the right direction, I think Chen will cut the cord on the handsets.

Is there "proof"? Of course not - that would cause BB's handset sales to crash, quickly followed by the stock price. When handsets are cut, it will be done more-or-less in secret, after most inventory has been sold to retailers, and BB will let that inventory run down before making the announcement that their "planned future devices" are being canceled and they are exiting the hardware business.

So, why do I believe this will happen? Because there is a ton of other evidence that, when added together, points to this conclusion. First and foremost, sales continue to drop. Second, production of new models has continued to slow, with likely only 1 or 2 models released in 2015. Third, the continued downsizing of the company, with cuts continuing to be made in the handset/hardware division. Fourth, the lack of advertising even with obviously-consumer products like the Leap, which is an answer to a question no one was asking. And fifth, every decision Chen has made has been consistent with this theory, even his statements that "we have no plans to leave hardware right now", which really means nothing, especially when he previously stated that "we'll keep making handsets as long as they're profitable" and now admits that they aren't.

I would expect the announcement sometime in mid-2016-early 2017, based on what I know today.

Agree 99%. The only thing that I'd disagree with you on is the fact that in the Bloomberg or CNBC interview the host said why are you still in the business if it's not profitable? Chen said, "because I think I can make it profitable". Obviously, this isn't conclusive by any means but it does hint he is making an effort toward monetizing the device business

[eyesopen1111]

Agree 99%. The only thing that I'd disagree with you on is the fact that in the Bloomberg or CNBC interview the host said why are you still in the business if it's not profitable? Chen said, "because I think I can make it profitable". Obviously, this isn't conclusive by any means but it does hint he is making an effort toward monetizing the device business

I think that the more logical interpretation of Chen�s statement is that it is tactical deception meant to keep up appearances that BlackBerry intends to remain in the handset business. There would be ways to make money, say patents perhaps, but a long term strategy selling handsets seems unlikely to me.

[Petertek]

Anyone surprised? Chen came to put in place a strategy for the shareholders, increase stock price and perceived value and sell the company. Nothing more than that. Not only Chen but pretty much all CEOs have the same purpose when companies are losing ground. Heinz move was dumb putting the for sale sign on the front lawn, but Chen is just trying to achieve the same.
Hardware is a tough business to be in, you need volume to survive on the thin margins. BB doesn't have volume , now the are getting on a high mix situation with so many devices which makes it even harder. The need to get software right and take a step back on hardware.

[kirson]

I think that the more logical interpretation of Chen’s statement is that it is tactical deception meant to keep up appearances that BlackBerry intends to remain in the handset business. There would be ways to make money, say patents perhaps, but a long term strategy selling handsets seems unlikely to me.

Moreover, I believe the line of questioning went something like "you are currently at 1% of the global smartphone market, where do you expect that share to go?" to which Chen replied he believed he could get it NORTH of 1%. The heroics!!

[theGUNNER]

Anyone surprised? Chen came to put in place a strategy for the shareholders, increase stock price and perceived value and sell the company. Nothing more than that. Not only Chen but pretty much all CEOs have the same purpose when companies are losing ground. Heinz move was dumb putting the for sale sign on the front lawn, but Chen is just trying to achieve the same.
Hardware is a tough business to be in, you need volume to survive on the thin margins. BB doesn't have volume , now the are getting on a high mix situation with so many devices which makes it even harder. The need to get software right and take a step back on hardware.

bullsh!t , BB device is a very first input to security, BB may cut some models but I cant imagine governors using those crap oses

[imatthebridge]

I think BlackBerry will give one last hail Mary on handsets and it will be a full on Google play certified android. If that phone isn't successful then they will dump the handset division. Android is their last ace in the hole.

Posted via CB10

I don't get why people are constantly talking about this idea of BlackBerry making an android phone. It's utterly stupid.

Posted via CB10

[kirson]

I don't get why people are constantly talking about this idea of BlackBerry making an android phone. It's utterly stupid.

Posted via CB10

Well, I'll grant you it's not popular. And I'll grant you it's not perfect. But it is definitely not stupid. It solves a lot of problems, creates a lot of opportunities, and has almost no down side at all. The only question is whether it can be accomplished with sufficient security to justify the premium pricing (or additional pricing) it will require. I think this is a very real possibility.

[conite]

At the very minimum, I think that BlackBerry will always have at least a couple of loss leader devices to provide to their ultra-secure customers as part of their overall BES portfolio.

Z30STA100-5/10.3.2.500

[BerryRipe]

I would like to see BlackBerry continue to make one PKB phone but that's just wishful thinking on my part.

Posted via CB10

[diehardbbuser]

I would like to see BlackBerry continue to make one PKB phone but that's just wishful thinking on my part.

Posted via CB10

Agreed but not the passport.. I don't want a brick of keyboard phone in my pocket.

[skibnik]

Hardware still makes up over half of BlackBerry's revenue so the only way they will get out of the hardware business totally is if they grow the software side of things to the point where the revenue earned from software outstrips hardware revenue.

Loving my Passport!

[kirson]

Hardware still makes up over half of BlackBerry's revenue so the only way they will get out of the hardware business totally is if they grow the software side of things to the point where the revenue earned from software outstrips hardware revenue.

Loving my Passport!

I think even the most critical among us agree that the exit would need to be timed carefully. You're point is spot on - too much revenue still tied into hardware sales. And that is precisely why the last few earnings calls have been so painful. That revenue is going away pretty fast.

[redlightblinking]

Since the Slider only "should" be launched this year, as a practical matter, the only new BlackBerry handset in 2015 will be the Leap.

I would say the Classic is a 2015 phone. Yea, they "released" it in late December, but carriers didn't' start selling until 2015. So, Classic, Leap, and Slider would be 3 phones in a year. That seems to be about the most they've put out in a year anyway. If they are getting ready to get rid of handsets, they sure keep putting out a lot of them.