08-29-13 02:35 PM
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  1. icedkermit's Avatar
    Stop quoting the 70 million users and $3 billion of when trying to defend BlackBerry. You're perpetuating a false sense of security.

    Most phones are sold on 2 or 3 year contracts. Let's look at the historical Q1 unit volumes.

    In Q1/11 - 3 years ago, BlackBerry sold 11.2 million phones. Almost all were connected to BlackBerry's servers and generated $60/year of service revenue.

    In Q1/12 - 2 years ago, BlackBerry sold 13.2 million phones. Almost all were connected to BlackBerry's servers and generated $60/year of service revenue.

    In Q1/13 - 1 years ago, BlackBerry sold 7.8 million phones. Almost all were connected to BlackBerry's servers and generated $60/year of service revenue.

    In Q1/14 - 2 months ago, BlackBerry sold 7.0 million phones. Approximately 4 million were BB7 or older and 3 million BB10's. BB10 devices don't necessarily contribute to service revenue. It's only the corporate versions that do and the rate is variable, depending on the level of service. Consumers are no longer paying the BlackBerry network access fee.

    The sales trend is alarming because the service revenue is based on that "70 million" number people keep quoting. As you can see from the sales trend above and knowing that phones are on a 2 or 3 year contract, it's pretty easy to see that the service revenue - the only profitable portion of BlackBerry - is about to decline very quickly. During the last earnings call, management stated that they are no longer going to be proving this number. This is why. Installed base and service revenue is about to start falling off a cliff.

    Additionally, this is why developers don't care about BlackBerry. Through May 31, 2013, only 5 million BB10's had been sold. Assuming 1 million of month of sales, maybe we're up to 7 million now. We're a passionate community, but not a very big one.

    The cash balance everyone refers to - the $3.1 billion - almost all of the increase in the past year or so was related to working capital management and this is a one-time trick. This is comprised of inventory, accounts payable and accounts receivable. Management was able to increase cash by buying less inventory, selling the inventory the did have, taking longer to pay their bills and trying to collect money from people who own money to them, quicker. They also got a huge, several hundred million dollar tax refund which didn't hurt.

    As a point of reference, in the last fiscal year, BlackBerry spent $3.6 billion on R&D, marketing and administration costs. They've cut some costs since then, but you get the idea. $3.1 billion sounds like a lot, but it can disappear very, very quickly.

    The scary part is this increase in cash was only achieved by cleaning up the balance sheet and before cash flow from service revenue started to decline materially. The next few quarters are going to be very scary for BlackBerry unless the basically double current handset sales or rapidly roll out BES10 (the one bright spot they have). BES10 has huge potential. They charge $90 per year per handset and can manage iPhone and Android. The problem is the software is still buggy.

    So again, please stop quoting the 70 million subscribers - it's akin to being told that a 100lbs bar of gold is valuable while you're trying to tread water - normally yes, but in this instance, no. The 70 million number is much less now, it's falling rapidly and BB10 developers don't care about 65 million of them. The cash balance is nice cushion for now, but if management doesn't start generating serious cash flow from BES10/ BB10 handset sales, it's going to disappear very quickly.
    08-19-13 06:02 PM
  2. Kid Vibe's Avatar
    08-19-13 06:04 PM
  3. systemvolker's Avatar
    I prefer blackberry because its just better feel. I don't need to defend blackberry, non of my business...

    And who the hell are you to tell people about that?
    Lol

    Posted via CB10
    08-19-13 06:07 PM
  4. z10fido's Avatar
    I think blackberry isn't as rough as shape as people say. How many companies have 70m subscribers and 3b cash and no debt?

    Posted via CB10
    Last edited by z10fido; 08-19-13 at 06:24 PM.
    08-19-13 06:12 PM
  5. lc474's Avatar
    I too am sick of hearing people talk about the 3.1 billion in cash, especially when 1.5 billion is in long term investment...
    3.1 billion can disappear very very fast, and this qrter is going to be extremely interesting.
    08-19-13 06:14 PM
  6. pmccartney's Avatar
    Subscribed.

    Now, where did I set my popcorn.

    Posted via CB10
    08-19-13 06:14 PM
  7. draconis123's Avatar
    I think blackberry isn't as rough as shape as people say. How many companies have 70mm subscribers and 3b cash and no debt?

    Posted via CB10
    You obviously just read the title and maybe skimmed through the post at best.

    Posted via CB10 on a kick *** Q10
    DoktorFace, gschep, bekkay and 4 others like this.
    08-19-13 06:19 PM
  8. z10fido's Avatar
    You obviously just read the title and maybe skimmed through the post at best.

    Posted via CB10 on a kick *** Q10
    I read it. But seriously. How many companies have 3b cash. And 70m users? That's pretty impressive.

    Posted via CB10
    08-19-13 06:21 PM
  9. eldricho's Avatar
    Subscribed.

    Now, where did I set my popcorn.

    Posted via CB10
    Right over here, good sir. Care to share some?Stop Quoting 70 Million Subscribers and  billion of Cash-10183208.jpg
    08-19-13 06:23 PM
  10. eldricho's Avatar
    You obviously just read the title and maybe skimmed through the post at best.

    Posted via CB10 on a kick *** Q10
    (Read the /s)
    08-19-13 06:24 PM
  11. z10fido's Avatar

    Additionally, this is why developers don't care about BlackBerry. Through May 31, 2013, only 5 million BB10's had been sold. Assuming 1 million of month of sales, maybe we're up to 7 million now. We're a passionate community, but not a very big one.
    5m sold? I've never seen that figure.


    Posted via CB10
    08-19-13 06:24 PM
  12. ibpluto's Avatar
    You obviously just read the title and maybe skimmed through the post at best.

    Posted via CB10 on a kick *** Q10
    You obviously don't see the humor in that post..... I LOL'd for real

    Swipe, swipe it good...via CB10 from my Z10
    08-19-13 06:24 PM
  13. collinc93's Avatar
    I think its closer to 77 million and maybe about 3.2 billion cash in hand plus other little whatnots....but my count could be off by a few decimals or so, but yeah its time we stop quoting 70 million subscribers and $3 billion dollars cash seeing as how that money is not even ours or Crackberry's or even mine. Truth be told I would love 70 million subscribers and $3 billion dollars in cash. Can anyone tell me how to get 70 million subscribers and 3 billion dollars in cash? I would love to have 70 million subscribers and $3 billion dollars in cash. How do I.....never mind. I now go buy lotto ticket
    08-19-13 06:30 PM
  14. icedkermit's Avatar
    5m sold? I've never seen that figure.


    Posted via CB10
    1.0 million from Q4 and 40% of 6.8 in Q1/14 - Total BB10 units is actually less than 5 million. It's actually 3.7 million at May 30 - even more depressing.
    08-19-13 06:31 PM
  15. collinc93's Avatar
    LOL that is Laugh out Loud and ROFL that is Rolling on the floor laughing.....I think this time I LOL'd that is.....ah
    08-19-13 06:33 PM
  16. icedkermit's Avatar
    Right over here, good sir. Care to share some?Click image for larger version. 

Name:	10183208.jpg 
Views:	2401 
Size:	182.4 KB 
ID:	194020
    I thought I ordered the large...
    eldricho, ATMJOE and Blacklatino like this.
    08-19-13 06:34 PM
  17. jpvj's Avatar
    BB10 devices don't necessarily contribute to service revenue. It's only the corporate versions that do and the rate is variable, depending on the level of service. Consumers are no longer paying the BlackBerry network access fee.
    I can't speak for all carriers etc, but I have not yet heard of a single country where BB10 needs a specific BB subscription to work (either consumer or corporate/BES10). BES 10 CALS are more or less free if you have an existing BES 5 and only a very small subset of customers pays for T-Support.

    So all in all BB10 is *not* contributing to annual service fees. BlackBerry are very well aware of this, so do not expect them to read your post and say: Hey we really missed that! ;-)

    I guess BB hoped they had sold much more devices by now and thereby beeing compensated somewhat from sales of Apps, Music and Videos, but it does not look like it happened as fast as they expected.

    /JP

    PS: Do I get the geek-sticky-marker attached to me when I notice this is my 2^7th post? ;-)
    08-19-13 06:36 PM
  18. eldricho's Avatar
    I thought I ordered the large...
    The large one is coming Soon, in the meanwhile you can Keep Moving
    Courtesy of Thorsten Heins himself
    currentodysseys likes this.
    08-19-13 06:37 PM
  19. icedkermit's Avatar
    I can't speak for all carriers etc, but I have not yet heard of a single country where BB10 needs a specific BB subscription to work. BES 10 CALS are more or less free if you have an existing BES 5 and only a very small subset of customers pays for T-Support.

    So all in all BB10 is *not* contributing to annual service fees.

    I guess BB hoped they had sold much more devices by now and thereby beeing compensated somewhat from sales of Apps, Music and Videos, but it does not look like it happened as fast as they expected.

    /JP
    BB10 contributes much less than BB7.

    The potential offset, is that BES10 is able to manage other devices - it's not an easy sell though.
    08-19-13 06:38 PM
  20. SEAWARRIOR's Avatar
    show me the berryfacts,,, those sales #'s are ficticious...
    08-19-13 06:39 PM
  21. jpvj's Avatar
    BB10 contributes much less than BB7.

    The potential offset, is that BES10 is able to manage other devices - it's not an easy sell though.
    Directly they only contributes with the profit of the handheld.
    Indirectly there are some protential (BB World one example), but their "Mobile Computing Platform" vision does not seem to have kicked off yet.
    I *really* would love to get a clear statement from BB about what they vision or even plan to deliver in the context of "Mobile Computing Platform".
    08-19-13 06:42 PM
  22. icedkermit's Avatar
    Directly they only contributes with the profit of the handheld.
    Indirectly there are some protential (BB World one example), but their "Mobile Computing Platform" vision does not seem to have kicked off yet.
    I *really* would love to get a clear statement from BB about what they vision or even plan to deliver in the context of "Mobile Computing Platform".
    That's another rant - people keep referring to QNX - if it was so special, it would have it's own line on the income statement. They haven't yet referred to how much revenue it generates - I'm guessing very little. I keep waiting too for big mobile computing, car software, something announcement... I'm going to run of out breath if I keep waiting. Company will go private before current shareholders/consumers benefit from that. Demo's have all looked amazing, so maybe I'm wrong and we'll see something soon.
    08-19-13 06:46 PM
  23. BBNation's Avatar
    Stop quoting the 70 million users and $3 billion of when trying to defend BlackBerry. You're perpetuating a false sense of security.

    Most phones are sold on 2 or 3 year contracts. Let's look at the historical Q1 unit volumes.

    In Q1/11 - 3 years ago, BlackBerry sold 11.2 million phones. Almost all were connected to BlackBerry's servers and generated $60/year of service revenue.

    In Q1/12 - 2 years ago, BlackBerry sold 13.2 million phones. Almost all were connected to BlackBerry's servers and generated $60/year of service revenue.

    In Q1/13 - 1 years ago, BlackBerry sold 7.8 million phones. Almost all were connected to BlackBerry's servers and generated $60/year of service revenue.

    In Q1/14 - 2 months ago, BlackBerry sold 7.0 million phones. Approximately 4 million were BB7 or older and 3 million BB10's. BB10 devices don't necessarily contribute to service revenue. It's only the corporate versions that do and the rate is variable, depending on the level of service. Consumers are no longer paying the BlackBerry network access fee.

    The sales trend is alarming because the service revenue is based on that "70 million" number people keep quoting. As you can see from the sales trend above and knowing that phones are on a 2 or 3 year contract, it's pretty easy to see that the service revenue - the only profitable portion of BlackBerry - is about to decline very quickly. During the last earnings call, management stated that they are no longer going to be proving this number. This is why. Installed base and service revenue is about to start falling off a cliff.

    Additionally, this is why developers don't care about BlackBerry. Through May 31, 2013, only 5 million BB10's had been sold. Assuming 1 million of month of sales, maybe we're up to 7 million now. We're a passionate community, but not a very big one.

    The cash balance everyone refers to - the $3.1 billion - almost all of the increase in the past year or so was related to working capital management and this is a one-time trick. This is comprised of inventory, accounts payable and accounts receivable. Management was able to increase cash by buying less inventory, selling the inventory the did have, taking longer to pay their bills and trying to collect money from people who own money to them, quicker. They also got a huge, several hundred million dollar tax refund which didn't hurt.

    As a point of reference, in the last fiscal year, BlackBerry spent $3.6 billion on R&D, marketing and administration costs. They've cut some costs since then, but you get the idea. $3.1 billion sounds like a lot, but it can disappear very, very quickly.

    The scary part is this increase in cash was only achieved by cleaning up the balance sheet and before cash flow from service revenue started to decline materially. The next few quarters are going to be very scary for BlackBerry unless the basically double current handset sales or rapidly roll out BES10 (the one bright spot they have). BES10 has huge potential. They charge $90 per year per handset and can manage iPhone and Android. The problem is the software is still buggy.

    So again, please stop quoting the 70 million subscribers - it's akin to being told that a 100lbs bar of gold is valuable while you're trying to tread water - normally yes, but in this instance, no. The 70 million number is much less now, it's falling rapidly and BB10 developers don't care about 65 million of them. The cash balance is nice cushion for now, but if management doesn't start generating serious cash flow from BES10/ BB10 handset sales, it's going to disappear very quickly.
    The point you seem to forgot is that not all countries do 2-3 years contracts. The contract thing is mostly North American thing, the rest is buy the phone and buy the plan separately.
    08-19-13 07:02 PM
  24. icedkermit's Avatar
    The point you seem to forgot is that not all countries do 2-3 years contracts. The contract thing is mostly North American thing, the rest is buy the phone and buy the plan separately.
    True. And that's make the case I present even worse.
    08-19-13 07:03 PM
  25. ccbs's Avatar
    Good read. Points are well made. Did people here ever think about why the management in such a rush to get the sale?
    By the time they have to report the coming dismal quarterly result, BBRY will be considered toxic asset and worth less than half they could fetch now.
    08-19-13 07:13 PM
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