[MisterMe11]

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....

[mrfreetruth]

I think the reaction from the market was over done and maybe even short manipulation . It seems like more noise then anything else. Last chance for shorts to cover.

[BBThemes]

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.

[Kevin Michaluk]

I'll flag this post to Umi so he finds it... good discussion!

[frielfanatic]

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.

[ADGrant]

The BES fees are not $50 per month, they are $10 per month or less (based on what the mobile networks charge for BB access). So you are only talking 160m in revenue.

[BBThemes]

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.

what? if you go BYOD they still need a MDM solution, so you have to pay for something, thats where fusion/BES10 comes in, as it works android and iOS as well as BB.

[Lehomer]

A wise person once told me "You get what you pay for "

[Knightcrawler]

If BIS is $192M with 64M subs, and we assume $8/sub/mo for BES with, that makes $128M, for a total of $320M. So wheres the other $680M coming from then?

im confused

[MisterMe11]

The BES fees are not $50 per month, they are $10 per month or less (based on what the mobile networks charge for BB access). So you are only talking 160m in revenue.

Corrected an error in my intial post - now I get about $9/month

[MisterMe11]

Sorry - first post had a dumb mistake in it (recovering from the flu - must have cooked my brain )

[MisterMe11]

If BIS is $192M with 64M subs, and we assume $8/sub/mo for BES with, that makes $128M, for a total of $320M. So wheres the other $680M coming from then?

im confused

When I found the mistake above, I got about $8.83/month
So 16M subs * $8.83/month * 3 months/quarter = $424M, and the remainder of $576M is from BIS according to these assumptions

[BBThemes]

was the service revenue the big change the mayans were predicting?

[Knightcrawler]

for a moment, it was the end of Rim's world on walstreet haha

[Thunderbuck]

what? if you go BYOD they still need a MDM solution, so you have to pay for something, thats where fusion/BES10 comes in, as it works android and iOS as well as BB.

I can tell you that my shop is a case in point. We're currently BB, but would like to go BYOD and we expect to do it through BES10 next summer.

[frielfanatic]

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.

[Thunderbuck]

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.

I think Balance will be a big drawing card. Remember that while it's deeply integrated into BB10 it's also available for Android and iOS through their Fusion clients.

[Knightcrawler]

woah woah woah.....BB Balanace can be made available on droid and ios?

[BaconMunch]

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.

[BBNation]

I know we pay over $40 for per month just for data for my work BB which is bell canada, I am sure RIM is getting huge cut of that..

[GTiLeo]

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"

[Superfly_FR]

A lot of answers here : RIM beats analyst forecasts, cash hoard grows - BNN News

[ADGrant]

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.

BIS fees are going to stop along with BIS which is going away with BB OS 10.

[Superfly_FR]

BIS fees are going to stop along with BIS which is going away with BB OS 10.

Not exactly. BIS is going away for BB10 devices as we may now it now (and is still operating "as-is" for BB5-7 devices). But new services (yet unveiled) are going to pop and generate revenues, based on the same network operating environment. Looks like this environement will be sliced in different stacks, depending on what consumer wants.
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.

[Dapper37]

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.

BB10 is a product not even out yet? It has effective services directed at BYOD, more than any other platform I'd say. Your assumption that the market direction of the last two years has been laid in stone highlights your need for more research. RIM has shown, people are liking what they see and agencies are welling to rethink their iphone purchasing plans.