WSJ: What kind of support and availability do you expect from carriers?
Thorsten Heins: It varies region by region. We met with about 100 carriers. Some of them were very supportive, because they knew it was something really different that they absolutely wanted. The U.S., with nationwide LTE, probably has the most rigorous testing cycles. So even to enter a lab you need to have already an entry lab certification, then you get certified at the lab. So this can lead to pretty long test cycles.
Actually. BB10 will be in the U.K. and Canada basically the day after tomorrow. That's a good quote, huh? The Day After Tomorrow? Seen that movie? The U.K. is gonna go hard. Canada is gonna go hard. Then you'll see [other countries] coming in the days and weeks to come. My best guess [for U.S. availability] at the moment is, and we're still working with them, we have a collective wish to pull it forward, is that we will be sitting in the U.S. in the middle of March.
WSJ: Why the delay in the U.S.? Was it due to price negotiations or only lab testing? Are you disappointed with the delay in the U.S.?
Mr. Heins: Carriers are very professional organizations, they know how to separate these two things [pricing negotiations versus lab testing]. They know if they leverage the lab entry process vs. pricing they lose, because they'll be late to market. The pricing negotiations as far as I know from my team are settled already. It's purely the testing procedure. They do the best they can. Would I have loved to see it earlier? Absolutely. Make no mistake everyone's trying to pull the date in—carriers and us collectively.
WSJ: Some carriers or potential RIM customers have said they'd rather wait and see how the BB10 devices do in the market before making any kind of commitment in terms of sales or marketing.
Mr. Heins: I cannot see what you're seeing that they're in wait-and-see mode. The carriers have seen the devices. The feedback is really, really exciting. When they do this, they plan their marketing promotions with us. They will spend dollars on it and we will spend dollars on it. It is a combined effort not just getting the product out the door but it's a combined effort also from marketing together. They want this platform to succeed, because they want choice. There's not much out there that they can go for that has a unique value proposition that's distinct that they can position in a different way.
WSJ: How much is RIM spending on marketing BB10?
Mr. Heins: I can't go into details with you. But it's gonna be big. Let's say several hundreds of million dollars. You will see a huge spend coming in the next quarter once it's launched, with a global marketing campaign.
WSJ: You have been emphasizing the functionality of BB10 as opposed to perhaps more consumer friendly attributes. Do you think that will catch on?
Mr. Heins: In a maturing market it's not advisable to be always everybody's darling, because you get too thin. You try to serve too many needs. But with Bring Your Own Device (BYOD) being a strong trend in the U.S. you're absolutely right we have to attract the consumer to get into the enterprise…
WSJ: In RIM's latest earnings call you suggested service fees would come under pressure. What options are you considering to replace that revenue?
Mr. Heins: There's a 79 million BlackBerry OS subscriber base, all on service access fees. That's not gonna disappear overnight. We are going through a transformation on the OS, and we're going through a transformation on the services side as well. What we do is look at enterprises, security and manageability start to segment [offerings]. Second, for consumers, we have a very strong platform with BBM. We want to leverage that BBM platform to create new services that are really value-added services that people, companies, whatever, are really willing to pay for.
I want to build services that are unique to our secure network, devices, whatever. That's the plan.
WSJ: Now that BB10 is out the door, investors and observers will start wondering whether or not you will start listening to offers from potential buyers or partners for the company?
Mr. Heins: I'm happy to take those calls and see what they come up with. But the first thing is the proof point. I think we have created a huge value in RIM, with BB10 and BES 10. Let's prove BB10, then let's see where it goes. I have to do what's best for the company and for the shareholders. So I'm not having the opportunity here to talk about concrete proposals. Because it really depends on what they put on the table and what they do.
WSJ: What kind of incentives or strategies have you had to use to convince potential partners like carriers or application companies to come on board with BB10?
Mr. Heins: I'm really admiring my team for what they pulled together. You've seen different attitudes toward [the potential of BB10] and they changed over time. The more they saw on the [prototype BB10 phones] of how BB10 would come to life the more encouraged they would get to work on BB10. Some were more aggressive to go there, some needed a little bit more convincing. It's not one approach fits all.
WSJ: Did you have to offer financial incentives?
Mr. Heins: I think we have a competitive offer. We will not stop. We will continue to work with people that we think are appropriate for our platform and where we provide a platform for them to make money.