[morganplus8]

It was a guess of build rate. I should have made that clear in my diatribe. Not to say they can't negotiate to increase production rate but that is my guess for their initial contract and build rate. And with that guess.... 8 weeks of builds before launch would have been 150-200K available at launch before this 2nd run became available Nov 23-24. I will also guess that they only book 100-150K Priv sales this quarter due to their accounting practices (sell through after return period is over). At the same time...I really hope they again change their accounting practices (this quarter) to go to sell through - activation ....without the return period buffer.

Here could be another 'conversative' *guess* if we keep that 2.6M number:

2.6M Privs + 1.2M BB10s (300K per quarter) + 1.2M 'new model' BB android devices (March-Oct 2016) = 5M unit sales per year.

But not conservative I will *guess* 4M+ Priv sales alone.....and a $18 SP at end of 2016 as we see revenue increase with device sales and QNX auto / OTA.updates.

Without any help what-so-ever from BlackBerry, I think your estimates are pretty solid. Chen thinks we saw a bottom in revenues for the next two quarters, that has to come from handsets so we should see some benefits this Q. If you are right about 150,000 this Q, the numbers should be very positive indeed. I too hope they revert back to standard accounting principles for hardware soon. Well done.

[3MIKE]

KBIO. What a Rollercoaster ride, not for the faint hearted!

Posted via the CrackBerry App for Android

[spiller]

Without any help what-so-ever from BlackBerry, I think your estimates are pretty solid. Chen thinks we saw a bottom in revenues for the next two quarters, that has to come from handsets so we should see some benefits this Q. If you are right about 150,000 this Q, the numbers should be very positive indeed. I too hope they revert back to standard accounting principles for hardware soon. Well done.

You will see my morning coffee hadn't kicked in yet. 8 wks would be 200-400K not 150-200K. But let's stick with the 150K Privs on the books for this Q.

[_dimi_]

Hi _dimi_ !!

I agree with you here, I want to see us doing over a 1 MM handsets per quarter to put to rest this nonsense about this phone being BlackBerry's last one. Even my Rogers friend told me that future handset sales are dependent on this phone. I don't think that's true at all but the media wants to hear it, analysts want to hear it and Chen sort of gave them what they want while knowing he has another phone lined up for next year.

Let's look at this whole thing in a different light, how much exposure would you want BlackBerry to have in terms of bottom line cost in this phone? At a cost of say $ 280 to BlackBerry all in, how many phones should they order and still live to fight another day? Suppose that number is 500,000 units on the first run, that money includes a successful launch of the Priv without recall risk etc.. At that level, they are risking $ 140 MM plus some risk on that number. Chen has to look at the refresh time for a second order versus a larger amount of exposure today. I hope he exposed the company to say $ 200 MM in bottom line costs plus risk. So now we are talking about 700,000 on order with units typically shipping in smaller amounts of say 200,000 for the first launch. This might be manageable and still favourable for BlackBerry with the initial delay. We will see some Priv's sold in Q3 and there will be enough for December assuming they haven't hit it out of the park of course.

What are your thoughts on the type and amount of risk for taking an all new product to market like the Priv?

Hi Morgan!!


Hope you're doing well & thanks for sharing your thoughts.

Perhaps we could use the Passport launch as our starting point. This launch seemed very promising, as they had received orders for 200,000 Passport units within the first 2 days of its launch. However, they ran into supposed supply constraints due to the non-standard screen, which resulted in BlackBerry not recognizing revenue for most of these Passports in the quarter of its launch. I expected this revenue to show up in one of the following quarters, but it seemed even *such* a successful launch couldn't offset the decline of the older BB10 (and perhaps BB7) handset revenue. Not even an uptick with its premium price?! Which brings me to the PRIV.

Your estimates would allow for a successful launch imho. However, I really don't believe they have manufactured or shipped 200,000 units, let alone sold through. I understand that Canadian stores are being supplied on a regular basis, but the other remaining countries where PRIV has launched, they're only selling it through either exclusive retailers (CPW in the UK and AT&T in the US) or online through shopblackberry and Amazon. To me, this just isn't good enough. I really hope that these countries/retailers can provide the volume that BlackBerry needs, but right now I am just not seeing it. Not when you push out delivery of pre-ordered handsets to end of November...I think either BlackBerry is too conservative, or Wistron is not willing to produce the appropriate amount of units before the holidays.

[morganplus8]

You will see my morning coffee hadn't kicked in yet. 8 wks would be 200-400K not 150-200K. But let's stick with the 150K Privs on the books for this Q.

But we don't have 8 weeks in Q3 for the Priv so 150,000 is a very generous number for this Q. The range could be anywhere from 10,000 to 200,000 so thanks for that John Chen. If this were Apple, we would get all phones manufactured or about to be manufactured included in their numbers, who cares if consumers actually hold the phone in their hands. The bottom line is that revenues aren't going to be growing in Q3 without an increase in handset sales for Q3.

[spiller]

Without any help what-so-ever from BlackBerry, I think your estimates are pretty solid. Chen thinks we saw a bottom in revenues for the next two quarters, that has to come from handsets so we should see some benefits this Q. If you are right about 150,000 this Q, the numbers should be very positive indeed. I too hope they revert back to standard accounting principles for hardware soon. Well done.

I'm a little worried about the device numbers this Q due to this launch. I can actually see device numbers declining Q/Q again to as low as 500-600K. Priv mix in increases ASP but I think revenue for hardware may still decline.

But I also think Chen wouldn't say they have hit bottom in revs without being sure. So I think he has a nice pile of licensing $ on the books this quarter, and it likely closed in September so he knew about it on the last CC. I think the software number is huge this quarter vs last quarter and again puts the analysts in a fizzy because they end up being way off and Chen makes them look bad...again. I think they probably negotiated a pretty nice contract with Ford for Sync 3 QNX and those $$ will start coming in as 2016 models are now being sold with this system.

Hardware is the wild card. If they hit 800K device sales with Priv mix in the hardware revs will be up pretty nicely....and then throw in all the software 'guesses' I put in there. But I think this is the last Q of declining hardware sales....I really hope Chen will come out on the CC and say they are expecting over 1M device sales for the Dec-Feb Q with "over half" being Priv. Then we see the stock really uptick!

[spiller]

But we don't have 8 weeks in Q3 for the Priv so 150,000 is a very generous number for this Q. The range could be anywhere from 10,000 to 200,000 so thanks for that John Chen. If this were Apple, we would get all phones manufactured or about to be manufactured included in their numbers, who cares if consumers actually hold the phone in their hands. The bottom line is that revenues aren't going to be growing in Q3 without an increase in handset sales for Q3.

8 weeks of builds BEFORE the launch (hardware was ready -- software wasn't -- but I'm no expert here how quickly that can burn updated firmware/software on built units)...most of it going out to carriers for the initial launch sales. If enough people were lined up in carrier pre-orders and first week sales they could have burned through this launch inventory in a week. That's the optimistic case.

[morganplus8]

Hi Morgan!!


Hope you're doing well & thanks for sharing your thoughts.

Perhaps we could use the Passport launch as our starting point. This launch seemed very promising, as they had received orders for 200,000 Passport units within the first 2 days of its launch. However, they ran into supposed supply constraints due to the non-standard screen, which resulted in BlackBerry not recognizing revenue for most of these Passports in the quarter of its launch. I expected this revenue to show up in one of the following quarters, but it seemed even *such* a successful launch couldn't offset the decline of the older BB10 (and perhaps BB7) handset revenue. Not even an uptick with its premium price?! Which brings me to the PRIV.

Your estimates would allow for a successful launch imho. However, I really don't believe they have manufactured or shipped 200,000 units, let alone sold through. I understand that Canadian stores are being supplied on a regular basis, but the other remaining countries where PRIV has launched, they're only selling it through either exclusive retailers (CPW in the UK and AT&T in the US) or online through shopblackberry and Amazon. To me, this just isn't good enough. I really hope that these countries/retailers can provide the volume that BlackBerry needs, but right now I am just not seeing it. Not when you push out delivery of pre-ordered handsets to end of November...I think either BlackBerry is too conservative, or Wistron is not willing to produce the appropriate amount of units before the holidays.

It's anybody's guess, they could have received 200,000 units from the manufacture but getting them out to retail outlets might be a heck of a problem on any scale. I don't like that Amazon keeps running out, it looks like they are getting 20 units per day. That's crazy, it is hard to get to 100,000 plus units sold in November at this snails pace. At the same time, John Chen is delighted with the demand knowing in advance what happened to the Passport, so maybe there is a surprise awaiting us? We just don't have a clue what is happening out there and James Faucette isn't there to hold our hand this time around because his boy is in jail and that's not BlackBerry's target market right now.

[peteberry12]

It's anybody's guess, they could have received 200,000 units from the manufacture but getting them out to retail outlets might be a heck of a problem on any scale. I don't like that Amazon keeps running out, it looks like they are getting 20 units per day. That's crazy, it is hard to get to 100,000 plus units sold in November at this snails pace. At the same time, John Chen is delighted with the demand knowing in advance what happened to the Passport, so maybe there is a surprise awaiting us? We just don't have a clue what is happening out there and James Faucette isn't there to hold our hand this time around because his boy is in jail and that's not BlackBerry's target market right now.

Re: Passport - I think that this is an interesting point. I've thought about that as well. I mean one would have thought that they would have approached the Priv release a little more aggressively than the Passport given the switch to Android and the increase in potential customers. But at this point, given limited information mind you, it's becoming difficult to see that they have even approached it at the same level as the Passport. I find it very difficult to read what the company's strategy is for the Priv.

[zlatno]

It was a guess of build rate. I should have made that clear in my diatribe. Not to say they can't negotiate to increase production rate but that is my guess for their initial contract and build rate. And with that guess.... 8 weeks of builds before launch would have been 150-200K available at launch before this 2nd run became available Nov 23-24. I will also guess that they only book 100-150K Priv sales this quarter due to their accounting practices (sell through after return period is over). At the same time...I really hope they again change their accounting practices (this quarter) to go to sell through - activation ....without the return period buffer.

Here could be another 'conversative' *guess* if we keep that 2.6M number:

2.6M Privs + 1.2M BB10s (300K per quarter) + 1.2M 'new model' BB android devices (March-Oct 2016) = 5M unit sales per year.

But not conservative I will *guess* 4M+ Priv sales alone.....and a $18 SP at end of 2016 as we see revenue increase with device sales and QNX auto / OTA.updates.

I understand everyone's perception that BlackBerry has dropped the ball on the launch of the PRIV. What I don't get is everyone's pessimism towards the launch of the PRIV. Does that make any sense?

There are many aspects that have to be considered regarding build rate, marketing, stock, etc... I will give my final 2 cents worth and I hope I am strong enough to not comment on this afterwards.

RE: Apparent sell-outs
- the initial fill wasn't only BlackBerry's projections. BlackBerry made what the carriers were willing to accept. I am sure (ok, not 100% sure) that if AT&T, Bell, Rogers, Carphone warehouse, Telus, internet sites, etc... wanted more initial stock, BlackBerry would have been more than happy to provide it. BlackBerry can't force inventory onto the carriers. I think the sell-outs should be on the carriers shoulders more so than BBs. AND if I was Chen, I wouldn't have made more than the carriers ordered for the initial fill.
- BlackBerry might not have been ready with enough inventory simply because they might not have had time. Maybe the PRIV wasn't ready or had some defects that had to be taken care of. Maybe the initial build was all they could get. If you (no one specific SF, simply a general 'you') think that they then should have waited until the PRIV was perfect and that the launch was perfect, no way. You want this out asap and especially long enough before the holidays so that people can put it on their X-mas lists. AT&T seems to have a USA exclusive which might have also prompted the lack of time for enough of a build-up.
- like another post mentioned, BlackBerry sold all of 800k the last Q. What number would have been the perfect initial quantity? You have to take initial carrier orders into your projections. Maybe BB did have some more inventory on the side but the sales went so well they had to ship them out to the carriers right away. (Woo-Hoo)
- BlackBerry has to fill the rest of the world. Hong Kong had a nice launch. Germany should be selling soon, if not already. Canada and the U.S. are not the only markets in the world.
- Why do people think that BlackBerry is that big and powerful that they can go to their manufacturer and force them to double (triple, five times, 10x) production immediately? Ever think that BlackBerry is not the only brand that these manufacturers are building for?

RE: Marketing of the PRIV
These complaints kill me the most.
- in the USA, it seems that AT&T have a exclusive period. I also recall Chen stating that AT&T have been a lot of help during the production and design phase of the PRIV. I also recall that Chen stated that AT&T will help with the initial marketing.
- I hear and read something about the PRIV almost daily. I am not looking for this, it just pops up out of thin air. Must be magic.
- if BlackBerry are having difficulty keeping the PRIV in stock, who exactly should they be 'wasting' money on? You don't market for the sake of marketing. Your goal is to sell more. If they don't have any inventory to sell then ...
- This is the BIG one. Marketing plans are done in advance. I don't mean a couple of days in advance. You have to make a plan, then go out and buy TV space, billboards, make commercials, etc... Everything that has to do with a marketing campaign is not done in a matter of weeks. If has to be carefully planned out and then put into action. Knowing that this has to be done in advance and not knowing exactly when the PRIV would be launched in most countries (right now I know of USA, Canada, UK, and HK), why would they spend on a big marketing campaign right at the beginning. Why not wait for more countries to launch? Why not wait for a season when people are more inclined to spend money? Why not wait for December, Just like Chen said in an interview?

Chen stated during an interview that BB(RY) would have a BIG marketing campaign ready for the holidays. He said that BB(RY) would spend more marketing $$$ on the PRIV than on any previous device release. No mention of a shoe-string marketing budget.

All we are hearing and reading about are sell-outs and great reviews. It's not bad to be a BlackBerry fan at the moment (unless you're still stuck on BB10).

My GUESStimate for device sales (and yes, it is just a guess) for this Q is 850k. If we hit this mark, we are golden. And when I say golden, yes, that means we will have so much money next year that we can dip ourselves in gold and walk around naked...

[morganplus8]

Re: Passport - I think that this is an interesting point. I've thought about that as well. I mean one would have thought that they would have approached the Priv release a little more aggressively than the Passport given the switch to Android and the increase in potential customers. But at this point, given limited information mind you, it's becoming difficult to see that they have even approached it at the same level as the Passport. I find it very difficult to read what the company's strategy is for the Priv.

This next Q might be the most dramatic one in many years for BlackBerry. We have a software company that sells phones that no one knows about or gives them credit for. We have a depressed stock price with a mandate to buy 21 million shares from the open market, and, we have over $ 600 MM in purchases going through this Q. As spiller points out, we have licensing deals that could rock everything and nothing is factored in there, the list is long for surprises here. For all we know, BlackBerry will change their accounting recognition approach to handset sales this Q too! Then there is their forecast for the next Q ......

[bbjdog]

Great discussion!

OT:

http://blogs.blackberry.com/2015/11/...ns-to-moments/

Posted via my BlackBerry Passport

[RLTurn77]

TD stole my shares :-(

(Possibly user error, first time using app on Priv)

I was changing the sell @ $X.XX and all of my shares were sold this morning for like $7.93 :-(

Hopefully will be able to get back in. Good luck to those still with shares. Mad!

Posted via the CrackBerry App for Android

[smart548]

TD stole my shares :-(

(Possibly user error, first time using app on Priv)

I was changing the sell @ $X.XX and all of my shares were sold this morning for like $7.93 :-(

Hopefully will be able to get back in. Good luck to those still with shares. Mad!

Posted via the CrackBerry App for Android

So you are on board with the Priv! Do you mind tell us your impressions so far? Do you believe you'll miss the 'real' hub and BB10 in general?
Where did you buy it? I believed in France wasn't yet officially available..

Posted via CB10

[bungaboy]

TD stole my shares :-(

(Possibly user error, first time using app on Priv)

I was changing the sell @ $X.XX and all of my shares were sold this morning for like $7.93 :-(

Hopefully will be able to get back in. Good luck to those still with shares. Mad!

Posted via the CrackBerry App for Android

#DroidRage

[tinochiko]

Oooh I saw a little 8.00

Posted via CB10
Attachment 382025

And again, such a tease

[Superfly_FR]

They still have Verizon and pretty much the rest of the world (other than UK/Canada/Hong Kong) to get this device to

FWIW I've never been questioned about a BlackBerry device availability date (France).
Priv is the first exception, while I might be only one of a few dozens to even mention it ...

[Superfly_FR]

no one specific SF, simply a general 'you'

[early2bed]

A perfectly logical strategy for the Priv would be to simply answer the question "Will people buy an Android BlackBerry and how much can we make?" He doesn't have to take much volume risk to answer this question. He already knows he has to slash the fixed costs of the hardware program. It's not as if he needs to preserve the current BlackBerry user base by suppling enough Privs. And, he certainly isn't counting on the hardware division to keep the company going. There is every reason to low-ball the volume as a low-risk low-reward strategy.

[Superfly_FR]

pop?

[bbjdog]

Interesting question!

http://crackberry.com/what-gadgets-d...ce-600-new-toy

Posted via my BlackBerry Passport

[Corbu]

High-Powered Fashion Maven Stays In Style With Her BlackBerry Passport (Pictures, Video) | Inside BlackBerry

[gedob]

The BlackBerry Priv has finally been released. The highly anticipated phone, which debuted in November, has been in high demand and sold out every time it gets restocked. BlackBerry may have created a phone that has the ability to function like a tablet with the size and simplicity of a smartphone. Is Blackberry Priv better than all of the android phones on market? Take a look at 4 reasons BlackBerry Priv is better than other Android phones.

BlackBerry Priv: 4 Reasons Priv Is Better Than Other Android Phones

[Superfly_FR]

Wow, looks like someone/something sits on the $7.99 line with a machete and beheads any sort of peak !

[Kris Erickson]

Anyone else see the tweet that Disney is now using the Passport for business?