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.