- CrackBerry Newbie
12-22-2012, 11:19 AM #52
- 5 Posts
Kevin emailed me about this thread so I thought I'd come over and contribute. Thanks for starting it, to the original poster.
The Service Revenues
I had a long chat with a few folks yesterday (Friday, day after earnings), and we went through our own historical knowledge on the numbers. We are guessing as best we can on the BES / BIS split (dollars and percentage of consumer vs enterprise split). Given the decline in the US market I have to wonder if BES is possibly as low as 10%? I'm not sure. There is no good way to solve this algebraically. There's not enough disclosure.
But for the sake of argument, let's go with 60% service revenue being BIS, the other 40% being from BES. That's about what most people are calculating with their various estimates, and I think it's a good ballpark for discussion.
Is BIS going away?
If we keep saying BIS is going away, we will confuse people who don't really understand it. It's just a label. BIS is a set of services. RIM gets paid for these services through the carrier, and in some markets, BlackBerry plans (BIS plans) still have an extra tax, so the consumer is aware. But in most markets, the tax is hidden in the cost of the data bill, and it's the carrier paying the tax. The consumer sees no difference in pricing.
BIS is not going away. Just the fees associated with it are going away, in some cases. I don't know what RIM is going to structure, but I do not believe the market will pay for BBM, Facebook, Twitter, and the improvement in efficiency on full-rate data plans. I DO BELIEVE the market is willing to pay a small fee to have differentiation of services available. For example, if a carrier wants to create a starter plan with only Facebook, Twitter, email (BIS-lite), and RIM is the only platform that can support these starter plans (i.e. differentiated by features being turned on or off NOT just bandwidth), then they could take a small fee.
Remember Apple has iCloud and all their iPhone-centric services. We know they aren't ultra-reliable yet but they do not get a fee from carriers for this. Why should RIM get a fee for BBM and Facebook (as someone suggested to me via Twitter)?
BES fees have room to grow - perhaps a lot.
RIM has lost market share in enterprise, and they could recapture some of that share. They could also gain market share in MDM by managing iOS / Android devices. I believe the BES model is shifting to a SaaS model with monthly fees being paid directly from the enterprise to RIM. The carrier won't be involved in this (my speculation). The data plan won't need to be anything special for BES / Mobile Fusion. The relationship will be enterprise to RIM direct. Clearly there is room for this to grow, and it could grow quite nicely over time. It's entirely possible for the growth in this to 100% offset (or more) the decline in BIS.
Near Term - what matters is hardware sales
Now that the market has responded to this "rude awakening" (that should have been obvious) of service fee risk, the fact of the matter is BB10 sales will be the big driver of revenue in the next few quarters. If RIM can transition a healthy percentage of its sales to a higher ASP device, and earn good margins, this drives EPS, and will drive the stock price.
The service fee issue is a longer term issue. It's not going to disappear overnight. It's probably a 2-year decline. So if RIM can show healthy momentum in replacing this via strong hardware sales and a rebuild of enterprise revenue (recurring), all will be OK.
The stock movement
People say it's being controlled by the shorts. That's not entirely true. What this really means is that the stock price is being driven by short term trading NOT fundamental buyers who are thinking about the long term performance of the business. Hedge funds will go long and go short depending on what they see happening, what they think the stock will do. When you get enough of these hedge fund buyers and sellers in the market, it becomes a huge speculative situation, with every trader trying to predict what other traders will do. Remember there is a buyer for every seller.
And no, when you see some analyst talking down the stock that does NOT mean his firm is secretly buying. That's not how the Sell Side makes money.Thanked by 14:
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- 12-22-2012, 11:30 AM #53
- 12-22-2012, 11:37 AM #54
- 12-22-2012, 11:55 AM #55
What no one seems to be pointing out, here in the forums and in the analyst reports, is that BB10 devices will probably do squat for the emerging markets for whom price is the biggest factor.
- 12-22-2012, 12:16 PM #56
I can appreciate why RIM communicated they were modifying the fee structure (they had to during the earnings call) but they clearly didn't want to until Jan 30th when they unveil the platform to the public. It isn't a perfect world and now investors are left with the decision to keep money on the table or leave it at risk based on partial information. January 30th can't come fast enough.
- 12-22-2012, 01:08 PM #58VOTE UP THE Z10!!!!!
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~*Jack of all trades can still be a master of some (. . .Hopefully)*~
- 12-22-2012, 01:26 PM #59
The latency issue is the video file going through the blackberry infrastructures --- i.e. if you live in Buffalo in the US, your traffic gets redirected up to Waterloo in Canada and then come back down to the US (therefore longer latency) --- but it has nothing to do with compression. A 25 MB highlight video of a home run will still be a 25 MB video file regardless of whether it goes straight to your phone or it goes through a scenic route through the blackberry infrastructures.
- 12-22-2012, 04:15 PM #60
However the point is not for a clip it's for watching live games. Anything that has to go through BB servers will have this latency problem. I really hope something can be done, I like having the games available on the phone, the chance to have the game running in the background while doing other things is great, means I can be mobile and still catch the important moments as they happen.
- CrackBerry Addict
12-22-2012, 05:39 PM #61
- 956 Posts
Is it not possible that three options could be available from RIM or rather the telcos?
One: Phone plan which includes data
Two: Phone plan which doesn't include data
Three: Phone plan from RIM offering a smorgasbord of limited data services, at different price points, to meet internet or social or communication needs. Or two of these options. Or all of them?
- 12-22-2012, 05:45 PM #62
- 12-22-2012, 06:05 PM #64
12-22-2012, 11:46 PM #68
- 870 Posts
I see the anti rim fanboys creating confusion when non exists. The service fees have been discussed at great lengths. Funny how its always the same people who poo poo everything rim. The question is why are they Here and are they vested interests in bashing rim?
- CrackBerry Addict
12-23-2012, 02:02 AM #69
- 819 Posts
We use BES server for current bbs and will be buying fusion to manage all 3 platforms and then migrate everything over to BES10 when it's avilable. RIM is messing with enterprise customers by not having BES10 ready before or with BB10 lauch. Our company will migrate to bb10 and buy bb10 phone in first week but how do you manage them. The management of these devices is must before any organization makes any purchase, it's unclear at this point. RIM's solution is to buy fusion now and then bes10 after few months...bad idead
- CrackBerry Abuser
12-23-2012, 03:57 AM #70
- 305 Posts
BBNation: It is NOT unclear at this point. A simple perusal on Blackberry's website indicates that Mobile Fusion will support Blackberry 10, iOS, in addition to Android.
In addition to your point, RIM is amalgamating ALL of its services into BES 10 (designed to be a simple upgrade from users already on Mobile Fusion)
Contary to your initial beliefs, the world is not ending. (Sorry, just hate ignorance and individuals that whine without doing their respective homework)
- 12-23-2012, 10:28 AM #71
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