1. Mathias1's Avatar
    Did anyone else notice the change in revenue recognition for hardware on the preliminary q2 report?

    "For the second quarter, the Company expects to recognize hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognized until those devices are sold through to end customers."

    From the above quote we see that they are only recognizing sales that were made to the end user.

    However, in the past they used to recognize revenue as the number of phones shipped to carriers. Here is an example from the Q1 report:

    "During the quarter, the Company shipped 6.8 million BlackBerry smartphones and approximately 100,000 BlackBerry PlayBook tablets."

    So from here we can see that Blackberry suddenly changed they way they recognize sales.

    Furthermore, in the q2 report, Blackberry says that they actually sold 5.9 million smartphones to end consumers but they couldn't recognize that as revenue since it included sales from shipments that were made last quarter which were already recognized as revenue in the previous quarter.
    here is the quote from the Q2 report:
    "During the second quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Companys inventory in channel."

    Therefore, it is because blackberry changed the way they recognize revenue that sales seem so low. If Blackberry used a consistent method of revenue recognition all along its numbers would be a lot better.

    For example if blackberry just used sales to end consumers all along then they would have reported sales of 5.9 million phones in Q2 instead of 3.7 million. That's more than 2 million phones that are not accounted for. That most likely would have put blackberry at a profit for Q2 since they were only down by 265 million (also assuming that you ignore the exaggerated inventory write-down).

    Does anyone else see this?
    Why would blackberry suddenly change their accounting practices now?? especially when the change would make them look even worse at a time like this.?

    And all this happened right before the buyout??
    :
    ami.one and Randeman like this.
    09-25-13 10:59 AM
  2. howarmat's Avatar
    We all saw it and i think most are scratching their head. Have to wait til friday to get the complete release to maybe get a better idea of what is going on IMO.
    Superfly_FR likes this.
    09-25-13 11:02 AM
  3. morganplus8's Avatar
    You need to take it one step further and conclude that if they really wanted to, they could have restated Q1 sales of phones at 4.6 million units down 2.2 million units instead of the reported 6.8 million handsets. If they went back and restated those phones that didn't sell to end customers, i.e., went into carrier hands but not sold, then the Q1 financial numbers would have looked terrible. Either way, the sales numbers aren't good. Going forward though, you must ask yourself what the true value of all of those BB 10 handsets are today, the ones that have been written down to zero. There is the gold in all of this, they just need to see more than a buck a phone to realize a profit to the bottom line. The balance sheet is now perfect for a buyer to step in and take over the company, you have BES10.1 received well along with a bundle of BB 10's at zero cost to market directly to them for profit. You have the company size scaled down to handle the demand and you have a better understanding of the demand for BB 10 phones. For instance, if you use 4.6 million handsets in Q1, you know that roughly 600,000 of those are BB 10's, for the next quarter, you can now say they sold at least 2.2 million BB 10's, that's a big improvement there. So it is likely that Q3 will show a big improvement and a profit. Now with BBM-X and the A30 phone, they could be setup for a great couple of quarters at a time when sales are much stronger than in this past quarter. The stars are aligning here and the media don't get it.
    bungaboy, Randeman and dusdal like this.
    09-25-13 11:37 AM
  4. Mathias1's Avatar
    Too bad that share holders will lose out all that up side potential if this buyout goes through. I would actually like to keep my shares in the company. I think that there are good times ahead in the long term.

    Posted via CB10
    bungaboy and Cardfs like this.
    09-25-13 11:43 AM
  5. anon1727506's Avatar
    mikeo007 and cgk like this.
    09-25-13 11:45 AM
  6. SMCNI1968's Avatar
    I assume they changed it as carriers will only pay BlackBerry as handsets are sold to customers

    Posted via CB10
    09-25-13 11:52 AM
  7. the_sleuth's Avatar
    BlackBerry was forced to use a more conservative revenue recognition due to FASB rules. Its previous revenue recognition by using devices shipped no longer met the "performance obligation" of the FASB revenue recognition rule:

    Recognize revenue when (or as) the business satisfies a performance obligation. An entity would recognize revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer. A good or service is considered transferred when (or as) the customer gains control of that good or service.

    For each separate performance obligation, an entity would determine whether it satisfies the performance obligation over time by transferring control of a good or service over time. If the entity does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time.
    It was probably on the advice of its accounting firm and legal to move to recognizing revenue only on devices sold due to high uncertainty as to when products will be sold to customers.
    09-25-13 12:12 PM
  8. greggebhardt's Avatar
    Too bad that share holders will lose out all that up side potential if this buyout goes through. I would actually like to keep my shares in the company. I think that there are good times ahead in the long term.

    Posted via CB10
    Hope you are right as there is not that much more room for it to go down! Looks like we will see BBRY in the $7 range today.
    09-25-13 12:19 PM
  9. Fuzzballz's Avatar
    you must ask yourself what the true value of all of those BB 10 handsets are today, the ones that have been written down to zero.
    The "value" is going to be negative, because they're going to have to pay someone to dispose of all of them. Ain't gonna be cheap, can't just dump 'em in the Waterloo landfill.
    09-25-13 12:45 PM
  10. anon1727506's Avatar
    The "value" is going to be negative, because they're going to have to pay someone to dispose of all of them. Ain't gonna be cheap, can't just dump 'em in the Waterloo landfill.
    Maybe a free Z10 with the purchase of a Z30???

    Or maybe a retro active BOGO offer, send all current Z10 owners a new Z10 for a friend...

    Or see if anyone is getting ready to redo the Sci-Fi Classic 2001: A Space Odyssey, maybe they would need some props to use for the monoliths....
    Fuzzballz likes this.
    09-25-13 01:11 PM
  11. njblackberry's Avatar
    The stars are aligning here and the media don't get it.
    Apparently neither do investors as the stock continues to fall and it is almost down to $8.
    Any analysis on why that is?
    09-25-13 01:24 PM
  12. njblackberry's Avatar
    The "value" is going to be negative, because they're going to have to pay someone to dispose of all of them. Ain't gonna be cheap, can't just dump 'em in the Waterloo landfill.
    Bury them under the Playbooks.
    09-25-13 01:24 PM
  13. cgk's Avatar
    Apparently neither do investors as the stock continues to fall and it is almost down to $8.
    Any analysis on why that is?
    Maybe a chart pointing towards $100?
    mikeo007 likes this.
    09-25-13 01:54 PM
  14. Bold_until_Hybrid_Comes's Avatar
    Maybe a chart pointing towards $100?
    "Good time to buy"
    09-25-13 03:40 PM

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