[kfh227]

I've been pondering this for a while. With BB10 around the corner and many people moving to iOS/Droid .... the one thing that will keep people with Android/iOS is the fact that they have up to 2 years left on their contract.

Even if BB10 launches and people love it and want it, they could be stuck with their current contract. I propose that RIMM offer to buy out people's contracts for those that have less than 3-9 months left on their contract. Do this for the first 3 months that BB10 is released. This will address 25% of the population on launch day. Of course this is an idealistic view. I know some people have fulfilled the first 2 years already. But it is better to be approximately right than precisely wrong when pondering these things.

Then modify the program after the first 3 months to be some sort of partial buyout.

RIMM, if you are listening to me, I have a Droid 3. If BB10 releases and it is the best thing out there, I am not buying it. My contract will have about a year left if BB10 launched in Q1 2013. Want me as a consumer, help me out somehow.

[cgk]

Why do people keep suggesting this? Margins are waffle-thin for RIM as it stands, such a scheme is not going to lead to profit.

[Thunderbuck]

RIMM could completely burn through what cash it has left if it does this.

Better: healthy trade-in allowances for current BlackBerry users...

[pantlesspenguin]

RIMM could completely burn through what cash it has left if it does this.

Better: healthy trade-in allowances for current BlackBerry users...

This I like. And maybe those old devices could be donated to a charity or something.

[aniym]

The game is up for RIM in developed country markets, iOS and Android (Samsung and HTC, really) are too deeply entrenched there, and consumers are all about ecosystems and apps. Microsoft had a go with WP7 and managed less than 1% marketshare in 2 years, most of that coming from the Lumia series, which itself only sold maybe 5 million.

RIM needs to pull an Apple and enter new market segments with less competition. Focus on Mobile Device Management solutions globally, including the Europe and North American markets. On the device front, focus on developing an ecosystem where there isn't one...emerging markets.

One way to do that would be to think about purchasing a social network that's fallen out of favor in the West. Friendster is long gone here but if I recall correctly, lives on successfully in Southeast Asia. Buy one of those networks and integrate it tightly with BBM (even though we know how good RIM is at integrating anything these days ). Leverage BBM Music to add record labels in countries where BB is still popular. Promote related hardware products like the Music Gateway, which can be marketed as a lower-cost version of Sonos and the upcoming Nexus Q. Create the end-to-end ecosystem that took Apple to where they are today. The opportunity exists, but won't for too long as Samsung is hungrily eyeing those markets already.

Competing on devices alone is a fool's errand. Vertically integrated supply chains are a rich man's game, and RIM is burning through cash right now. They are also essentially a joke brand outside of government in the developed world, and trying to force its way back in without anything to fall back on is a recipe for disaster.

[kfh227]

Why do people keep suggesting this? Margins are waffle-thin for RIM as it stands, such a scheme is not going to lead to profit.

Generating $550m last quarter in free cash flow on $4 billion of revenues? That's not thin at all. That is fat.

In corporate finance, free cash flow (FCF) is cash flow available for distribution among all the securities holders of an organization. They include equity holders, debt holders, preferred stock holders, convertible security holders, and so on.

All they need to do is take some of that $550m and put it towards promoting the BB10. Maybe a pre-buy your BB10 and we buy out your contract offer.

[kfh227]

aniym,

You just stated RIMMs policy on India regarding getting entrenched there ;-)

Perosnally, I have a Droid and have no reason to say that I am staying with a Droid. I don't care about hte 1 or 2 apps I actually paid for and I bought no media. This is my case, my brother in laws, all the software engineers I work with, my father in law, etc. The only people "entrenched" are teenagers because tehy waste money on crappy music and games. Adults don't do that in many cases.

I want e-mail, a web browsers, a good MP3 player and a good app for running/biking. Any smartphone does this. I would bet that over half of the poplation is in this category.

EDIT: Wow. only 25% of smartphone owners listen to music on them!
http://www.newmediatrendwatch.com/ma...mobile-devices

Entrenchment is a myth. Learned something new today.

[cgk]

Generating $550m last quarter in free cash flow on $4 billion of revenues? That's not thin at all. That is fat.

That was generated on services, hardware margins are either zero or negative.

[kraski]

RIMM could completely burn through what cash it has left if it does this.

Better: healthy trade-in allowances for current BlackBerry users...

I'm with you on this one. The value to the customer of contract buyout varies, depending on the carrier. Mine allows early upgrade after a year, the customer starts a new contract from that date for 2 years, the early upgrade cost is whatever normal upgrade price might be plus a $36 US fee. So, the above gives the consumer more.

Here's another thought. The customer gets a BB10 phone on contract. If, after 6 months he doesn't like it, RIM pays the difference between full cost and contract price to replace it with something else. Unless one of the other phone makers brings out the next best thing since sliced bread, there aren't likely to be many takers. By 6 months, most phone buyers have purchased a bunch of apps and accessories, making a switch less tempting. And they have enough time to get used to the phone, where switching phones becomes more of a hassle. And the offer is likely to draw in previously non-BB owners.

[silversun10]

That was generated on services, hardware margins are either zero or negative.

and to sell the service you need to sell the phones first, so RIM has become Gillette, where Gillette "gives away" shavers(phones) to be able to sell razor blades(services)........:

[MobileMadness002]

RIMM does not need to do any such thing, people need to realize they make their decisions regarding the purchase of devices. If the customer wants BB10, they need to purchase BB10, not BB7 and expect RIM to give them BB10 OS and Hardware. That's just plain stupid and ******** thinking

I had no such delusions of scalability when I purchased OS6(9800) and have even less delusions with my OS7(9810). Stop thinking RIMM owes any of us anything when it comes to the physical hardware and the scalability to the newer OS.

[timmy t]

They should put out the new hardware phones with the old OS and let people upgrade to BB10 when it becomes available, if technically feasible.
That way, they don't have to refund or replace anything.
Most people are not going to buy a high-end smartphone that will become obsolete in 6 months.
Anyone know why the current OS7 phones will not be able to run BB10? Is it the cpu or the display?

[MobileMadness002]

Who says they need to refund or replace anything any ways. The consumer made the decision to purchase their phone, RIMM did not force the purchase on them.

This is typical of the everyone owes me everything mentality.

[DocDRM]

RIMM does not need to do any such thing, people need to realize they make their decisions regarding the purchase of devices. If the customer wants BB10, they need to purchase BB10, not BB7 and expect RIM to give them BB10 OS and Hardware. That's just plain stupid and ******** thinking

I had no such delusions of scalability when I purchased OS6(9800) and have even less delusions with my OS7(9810). Stop thinking RIMM owes any of us anything when it comes to the physical hardware and the scalability to the newer OS.

Sometimes my wit is only witty to me, I know, but instantly when I read your signature, I thought "There needs to be a third line after Pin 1 and Pin 2" . . . . "Pinto (Ford Motor Company) 1971�1980."

[ajst222]

That would be nice...except it would cost RIM a fortune.

[Speedygi]

If they can get a release out in Jan 2013, that is enough of a victory as far as I'm concerned, and the best move they can make.

[kraski]

Who says they need to refund or replace anything any ways. The consumer made the decision to purchase their phone, RIMM did not force the purchase on them.

This is typical of the everyone owes me everything mentality.

You're right. But I don't see this as RIM feeding the "you owe me" attitude. RIM got behind the rest of the market, made some small missteps that the media blew out of proportion. Then made some larger mistakes. Also blown out of proportion by negative press. And some negative reviews of BB10 (too little, too late).

The result of that is a new OS that people are unsure of. From a company that consumers aren't sure will remain stable long enough to really support anything they sell. Thinking of those two factors, if you weren't already a BB owner and had some history with RIM, would you take a chance? Especially with no special pricing?

That's why I suggested the 6 month trial. As I said, the consumer is likely to buy apps and accessories. So, the returns are likely to be small. It's also long enough to get past the learning curve period, coming from any other OS. And long enough for consumers to get comfortable with the phone. It gives RIM some sales to keep going and it gives the consumer greater comfortability with the BB10 product and RIM because they appear to offer more incentive to try the phone. Plus regaining a greater image of stability.

[Moonbase0ne]

They really just need to finish BB10, at least enough so that they can release it. They need to stop announcing release dates/quarters and then changing them later. They need to stop saying things like "amateur hour is over" and then they are the ones who end up looking like amateurs. They need a new, catchy slogan, because, I just don't see "Be Bold" and "People that do" working out for them. They need to actually market and promote what they are trying to sell.

They need to shut up and deliver.

[BitPusher2600]

Democrats
J/K

If RIM were to do something like the OP is suggesting it would damage them big time wouldn't it? I wish I could remember the exacts, but wasn't there some kind of worry going on at RIM when OS 7 had been out a bit and they had statistics showing much of their user base was still on OS 5 and OS 6? Something like that would destroy their remaining profit margin. Still, when BB10 is released it wouldn't hurt to see another "Bold-A-Day" contest or two either.

Written with BitPusher's *BlackBerry 9650* using Tapatalk

[SDM7171]

I have a very cynical view about all these threads that bang on about RIM subsidising access to BB10. When will OP's contract be up for renewal?

Surely if BB10 is perceived as "good" at launch, it'll be desirable and won't NEED subsidising by free upgrades for BB7 users or buying out remaining carrier discounts on every other platform? At any given time, millions of people are either

a - eligible for upgrade.
b - very close to eligible.
c - out of contract.
d - on PAYG.

So, the marketing will be aimed at those groups. If those millions of people aren't enough to get BB10 selling, then no amount of subsidy will save it anyway, however much group e (in contract for months to come) will whine because they want to be cutting edge but won't pony up the cost.

[Pete6]

Cranial Rectal Insersion.

This whole idea is nuts. It would cost a fortune, would not bring new customers, would waste resources and would create a glut of working phones that would proobably end up in developing countries and would prevent sales there too.

This idea does no one a favor and should be forgotten quickly. It has no redeeming merits, imo.

[pillsy]

don't worry, by the time BB10 actually launches, people buying andriod/ios now will already be out of contract anwyay

[silversun10]

yes, it will be costly, the thing is getting your customers back will cost RIM more, so NO it is not to please the customers, it is strictly for RIM's survival, you guys know how much it costs to get new customers?