Chris Umiastowski's analysis on RIM Service fees
Chris - thanks for all the helpful articles
I'd like to look at the service fees in a little more detail using your numbers/assumptions from your article today:
Chris on BIS fees:"I'd estimate it now sits at $2-4 per month in most markets"
Chris on BIS/BES split: "If I had to guess I would say BIS subscribers make up about 80% of RIM's total subscriber base. BES subscribers are the remaining 20%."
So, if we round to 80 million subscribers (just to keep the math easier), then
BIS subscribers = 80M * 80% = 64M * ~$3/month * 3 months/quarter = $576M
BES subscribers = 80M * 20% = 16M --> total monthy service revenues = $1000M - $576M = $424 M (or $424/16/3 = $8.8 /sub/month)
So the BIS fees are under threat, and they are close to 60% of the total? The (corrected) BES fees I would guess are about $9/month/user - assuming that something like Good on an iPhone would be about the same.
Hopefully they can hold onto the BES fees while introducing a tiered BIS plan (and retaining at least some of the $576M)
There is also some potential to gain Fusion customers on other platforms as well
What do you think? Of course the service fees are high margin....
Last edited by MisterMe11; 12-20-12 at 11:34 PM. Reason: corrected my poor arithmetic
- 12-20-12, 10:58 PM #3
dont forget BES10/Fusion fees, thats not just a BB controlling product, its a full MDM product like mobileiron and such, so you can service more clients than just your BB devices.
also, if they license BB10 then there`s extra revenue, before you even look at BBM Music, BBM Money and the new capabilities of BB World.
- 12-20-12, 11:17 PM #5
Re: Chris Umiastowski's analysis on RIM Service fees
I knew the bes/bis issue was going to be huge for rim. Banking on current bes customers to migrate to fusion is a pipe dream. A very high percentage of bes customers have been testing iphones and activesync for the past couple years. Large companies I work with are migrating to I phones or byod. The service fees go away, and rimm goes away. I will be purchasing a bb10 device opening day, but when employees are given a choice of devices, iphone is their choice.
- 12-20-12, 11:30 PM #7
- 12-20-12, 11:44 PM #13
was the service revenue the big change the mayans were predicting?
- 12-21-12, 12:33 AM #15
- 12-21-12, 12:34 AM #16
Re: Chris Umiastowski's analysis on RIM Service fees
People who are testing and migrating to other platforms are not testing through fusion. They are pushing activesync policies that require lock passwords and remote exchange wipe. If these devices make the cut, why pay a premium? Many companies are phasing out bes servers and requiring activesync, which blocks current blackberries.
- 12-21-12, 01:09 AM #19
I think there's something that needs to happen here. BIS fees need to stop, dealing with the carriers is going to make this an obvious point, this monthly $ amount is not sustainable and moreover there's so much more services BB can offer. I think more value added services need to be there, and RIM needs to make it painfully easy to purchase (carrier billing will help) or take a % off transactions. I think if Microsoft can maintain healthy Gold Live services, I think a fully integrated home can run a BB subscription as well, up to $50/annum, it would be the average cost of one month of phone service.
- 12-21-12, 06:21 AM #21
i posted this in the other thread about teiring the fees.
i personally wouldn't mind paying these fees, what BIS offers in the data compression makes my monthly fees cheaper then if i had to upgrade from my 500mb to 1 gig. the $2-4 a month fee is diddly when you think about the fact that BIS compresses your data usage by as much as 4 times what others do. so for my usage of about 400 mb a month on say an android i would prob use atleast double and would have to upgrade which would cost me an extra $5 per 500mb, and $4 is cheaper then $5 so i see a benefit there don't you, not to mention more secure, less spam mail, BBM. benefits out weigh the cost.
RIM should abolish the fees just for those that complain abotu the fee and then once they notice the hick in their bill RIM should slap them in the face with a bigger fee and say "here clowns you wanted it gone now want it back, pay the extra money"
- 12-21-12, 06:26 AM #22
- 12-21-12, 07:18 AM #24
I believe the list starts with BBM (with several levels for txt only, chat/video ???) but also "on demand" services, hosted apps, cloud storage ...
Also add all the industrial channel with QNX devices (connected to the manufacturer for maintenance in cars for example).
At the end, I wonder how many users will choose not to subscribe the whole thing if the extra cost does not exceed $1-2 (say for full BBM + Protect ?) per month.
Look at how much some can pay for cloud services (while they could use free alternatives) just because it's ffully integrated in their environment ...
I believe Thor has blured the picture as the stock price is not relevant for now and RIM wants the full monty to append on Jan. 30th.
- 12-21-12, 07:57 AM #25
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