[chrysaurora]

Is anyone aware of the current BES 7 installations active at the moment. I'm trying to build a model for the BES 10 service to try and guesstimate the potential revenue.

So far my understanding of the entire system.....

Under BES10:

1. Android & iOS devices are compatible and cost $100 per year
2. Blackberry 10 devices bring in $100 revenue
3. Margins are roughly 86%
4. Currently 19,000 installations, testing phase or implementing phase of the platform
5. Can assume companies using BES 10 have an average of 200 devices (don't know how accurate this is)
6. BES10 began roll out in.....???(Looking for an exact time frame so I can extrapolate the uptake)

Let me provide some information here.

1. Yes, one license ('CAL' as it's called) is $100/year ($99 to be accurate). There is going to be some 'volume' discount though, for sure.

This CAL is required regardless of whether you use Secure WorkSpaces app or the BB10 device itself. The license fee is the same.
The only difference is that when the company buys an actual BlackBerry device, BlackBerry makes money on sale of hardware as well. On the other hand, when a company buys CAL license for Secure WorkSpace app, BlackBerry still makes $100/year but doesn't make any one-time profit on hardware sale.

2. Margins are over 80%; based on general consensus. I haven't done any number crunching myself. But this is likely to be very close to accurate, as this is just license-fee is just recurring service revenue. Cost of providing service is much lower.

3. 19,000 have installed, downloaded or ordered BES 10.1 / Secure WorkSpace app.

4. 200 / devices / per company is too low. Most big companies have 1000s of employees that get company paid smartphone. I've worked for 4 F500 companies in my life (since 2008) and I got a smartphone paid for by the company (as did thousands of other employees). But use whatever number you are comfortable with. I can only speculate.

My own model would look something like this:

1. Assume 60% of 19,000 companies install/pay for BES 10.1 . That's 11,400 BES 10.1
2. Assume 2,000 licenses per company (which, given my experience working for 4 different large companies, sounds reasonable).
3. Assume $100/license fee per device (regardless of whether this is BB 10 device or just Secure Work Space app)
That gives us 11,400 (companies) x 2,000 (licenses) x $100 (fee) = $2.28 B/year

But wait..there are some subtractions too.
1. Subtract 20% volume discount. That now leaves us with $1.824 B/ year
So, based on my model $1.824 B is going to be yearly revenue.

But wait..there is another subtraction. That is, how much of this $1.824 B is already included in existing revenue of BlackBerry? How much is net-new revenue from BES 10.1/Secure WorkSpace app? I think that's what we are interested in.

So...

Let's assume 100% of these 11,400 companies were already BlackBerry shops. That is, they already had BES installed. And already were paying a service fee. They simply "upgraded" to BES 10.1. But (most likely) not all their employees were on BlackBerry devices. Some probably had iPhone or Android. So, BlackBerry was not getting any recurring licensing revenue from non-BB devices. But now with Secure WorkSpaces app, BlackBerry will gain revenue even from non BB devices.

So, I am going to assume that these companies (already BB shops) already had 75% of their corporate devices as BlackBerry's. That is, 75% of this revenue is already included in the $1.824 B figrue I came up with. And only about 25% is net-new revenue (coming from non BB devices).

So, let's subtract 75% (existing revenue) from $1.824 B. And this leaves us with $456 M /year of additional revenue. If profit margin is 85%, net new profit should be $387 Million / year from non BB devices.

This is assuming only 60% conversion from 19,000 companies. It's very likely that 19,000 is a very very early number and it'll go up significantly in next 4-5 months.

Now, another question is -- when will we start seeing this revenue?

From BlackBerry conference I attended and from their own site, we can see that there is a 60 days trial of BES 10.1 and Secure Work Space app. So, if these 11,400 companies were to convert to paying customers at the end of their trial, we won't see any revenue from them for another 60 days. So, it's unlikely to show up in September ER. But it should start showing up in December 2013 Earning Report.

Feel free to poke holes in this model. Feel free to use different numbers and different set of assumptions.

[CDM76]

And the IGNORE list continues to grow.

Unfortunately the ignore function doesn't work on my Z10.

Posted via CB10

[Compaqee]

Let me provide some information here.

1. Yes, one license ('CAL' as it's called) is $100/year ($99 to be accurate). There is going to be some 'volume' discount though, for sure.

This CAL is required regardless of whether you use Secure WorkSpaces app or the BB10 device itself. The license fee is the same.
The only difference is that when the company buys an actual BlackBerry device, BlackBerry makes money on sale of hardware as well. On the other hand, when a company buys CAL license for Secure WorkSpace app, BlackBerry still makes $100/year but doesn't make any one-time profit on hardware sale.

2. Margins are over 80%; based on general consensus. I haven't done any number crunching myself. But this is likely to be very close to accurate, as this is just license-fee is just recurring service revenue. Cost of providing service is much lower.

3. 19,000 have installed, downloaded or ordered BES 10.1 / Secure WorkSpace app.

4. 200 / devices / per company is too low. Most big companies have 1000s of employees that get company paid smartphone. I've worked for 4 F500 companies in my life (since 2008) and I got a smartphone paid for by the company (as did thousands of other employees). But use whatever number you are comfortable with. I can only speculate.

My own model would look something like this:

1. Assume 60% of 19,000 companies install/pay for BES 10.1 . That's 11,400 BES 10.1
2. Assume 2,000 licenses per company (which, given my experience working for 4 different large companies, sounds reasonable).
3. Assume $100/license fee per device (regardless of whether this is BB 10 device or just Secure Work Space app)
That gives us 11,400 (companies) x 2,000 (licenses) x $100 (fee) = $2.28 B/year

But wait..there are some subtractions too.
1. Subtract 20% volume discount. That now leaves us with $1.824 B/ year
So, based on my model $1.824 B is going to be yearly revenue.

But wait..there is another subtraction. That is, how much of this $1.824 B is already included in existing revenue of BlackBerry? How much is net-new revenue from BES 10.1/Secure WorkSpace app? I think that's what we are interested in.

So...

Let's assume 100% of these 11,400 companies were already BlackBerry shops. That is, they already had BES installed. And already were paying a service fee. They simply "upgraded" to BES 10.1. But (most likely) not all their employees were on BlackBerry devices. Some probably had iPhone or Android. So, BlackBerry was not getting any recurring licensing revenue from non-BB devices. But now with Secure WorkSpaces app, BlackBerry will gain revenue even from non BB devices.

So, I am going to assume that these companies (already BB shops) already had 75% of their corporate devices as BlackBerry's. That is, 75% of this revenue is already included in the $1.824 B figrue I came up with. And only about 25% is net-new revenue (coming from non BB devices).

So, let's subtract 75% (existing revenue) from $1.824 B. And this leaves us with $456 M /year of additional revenue. If profit margin is 85%, net new profit should be $387 Million / year from non BB devices.

This is assuming only 60% conversion from 19,000 companies. It's very likely that 19,000 is a very very early number and it'll go up significantly in next 4-5 months.

Now, another question is -- when will we start seeing this revenue?

From BlackBerry conference I attended and from their own site, we can see that there is a 60 days trial of BES 10.1 and Secure Work Space app. So, if these 11,400 companies were to convert to paying customers at the end of their trial, we won't see any revenue from them for another 60 days. So, it's unlikely to show up in September ER. But it should start showing up in December 2013 Earning Report.

Feel free to poke holes in this model. Feel free to use different numbers and different set of assumptions.

Thanks so much for taking the time to walk through the thought process I really appreciate it! I'll try to go through the numbers again and plug different numbers in to see how it goes and create an analysis of my own. Really great insight!

The reason I ask this was simply because, hardware doesn't seem so far to be BBRY's saving grace, but it's security and MDM solution may be.

Cheers!

[kfh227]

You're welcome.

I guess it depends on how much smartphone users care about their privacy. At this point it doesn't seem like the general public cares much that their civil liberties are continuously being taken in the name of national security.

We don't know what the mods are. Could be patches for security holes that could effect econmerce.

Posted via CB10

[kfh227]

For licenses, estimate blocks of companies by headcount.
There is no way the mean is 2000.

Posted via CB10

[chrysaurora]

For licenses, estimate blocks of companies by headcount.
There is no way the mean is 2000.

See: http://curtismorley.com/2011/02/02/h...000-employees/

Firms with 1,000 to 1,499 employees 2,916
Firms with 1,500 to 1,999 employees 1,542
Firms with 2,000 to 2,499 employees 942
Firms with 2,500 to 4,999 employees 1,920
Firms with 5,000 employees or more 1,927
Firms with 5,000 to 9,999 employees 952
Firms with 10,000 employees or more 975
Hoovers shows that it has data on 6994 companies with over 1000 employees. Hoovers is very accurate in the collection and sorting of data but does not look to have all records.

That's US alone. BES 10.1 is being installed WORLD OVER!

[1stTry]

BlackBerry opens Infrastructure for intelligence agencies in India

http://www.theregister.co.uk/2013/07...pooks_access/#

They point out, that BES is still secure, but in my opinion it is a PR desaster!

[cgk]

Is anyone aware of the current BES 7 installations active at the moment. I'm trying to build a model for the BES 10 service to try and guesstimate the potential revenue.

So far my understanding of the entire system.....

Under BES10:

1. Android & iOS devices are compatible and cost $100 per year
2. Blackberry 10 devices bring in $100 revenue
3. Margins are roughly 86%
4. Currently 19,000 installations, testing phase or implementing phase of the platform
5. Can assume companies using BES 10 have an average of 200 devices (don't know how accurate this is)
6. BES10 began roll out in.....???(Looking for an exact time frame so I can extrapolate the uptake)

Thanks for any light you fok can shed on this!

Cheers!

The problem is that Heins talks about "downloaded" in that number - that can mean that a single techny has downloaded it, played with it and forgot it - unless we have hard client numbers from BBRY that excludes that, hard to work out.

[Kid Vibe]

Since the company is in Phase 2... It might be reasonable to not expect profits until December or next March even... One year from now we will have a much better understanding where the company is at (unless they get bought out).

[cgk]

I am seeing reports in other thread that the Carphoneware in the UK has sent back most of its z10 stock because they can't sell it but not a decent source? anyone know anything about this or have any sources?

[1stTry]

And 19.000 downloads worldwide is not that much.
Most of them are not Fortune 500 and use only 5 to 10 clients.

My best case calculation:19000 x 50 = 950000 Clients

Not really a game changer

[Zarpan]

I am seeing reports in other thread that the Carphoneware in the UK has sent back most of its z10 stock because they can't sell it but not a decent source? anyone know anything about this or have any sources?

Which thread was that? I doubt they've sent back their stock since the Z10 hasn't been discounted to clearance levels at Carphone Warehouse yet. When the HTC First (Facebook Phone) flopped, AT&T just discounted it to 99 cents on contract to clear out inventory rather than send it back.

[greggebhardt]

Thanks for the article.

Shouldn't BlackBerry take advantage of this situation immediately?

Advantage for what? Blackberry is no more secure that iPhone for the average user. I am betting that even BES is not a wall that can not be penetrated by our government. Security is no longer absolute and likely has not been for some time now. Our government's secret is out of the bag now and they are not about ready to stop what they are doing. At best we would simply drive it in back of the curtain again, but not stop it.

[cgk]

BlackBerry opens Infrastructure for intelligence agencies in India

BlackBerry gives Indian spooks BBM and BIS access ? The Register

They point out, that BES is still secure, but in my opinion it is a PR desaster!

The Register's Q5 review had what I thought was an odd comment:

The app market is not just barren of quality native apps, but actually quite pitiful, with no quality control exerted. When your reviewer took a look, it was awash with scams.

BlackBerry's retro-look QWERTY Q5 mobe: Resentment by design ? The Register


??????????????????????????

[W Hoa]

I am seeing reports in other thread that the Carphoneware in the UK has sent back most of its z10 stock because they can't sell it but not a decent source? anyone know anything about this or have any sources?

Still available. Quantities unknown.

[leafs123]

Since the company is in Phase 2... It might be reasonable to not expect profits until December or next March even... One year from now we will have a much better understanding where the company is at (unless they get bought out).

Ya, he said profitability should be expected for fiscal 2015, not 2014.

Posted via CB10

[plasmid_boy]

I know that Premarket numbers don't mean much, but we are up 1.7% in PM so far.

Posted via CB10

[Kid Vibe]

I know that Premarket numbers don't mean much, but we are up 1.7% in PM so far.
Posted via CB10

Man jet lag suckssss... lol... so early. Lets go BB! LOL.

[cjcampbell]

I know that Premarket numbers don't mean much, but we are up 1.7% in PM so far.

Posted via CB10

Lol. I saw that but refrained after yesterday. We were up a lot PM and look where that got us.

Posted via CB10

[leafs123]

Every morning we've been up in PM since the ER and it hasn't held.

Posted via CB10

[Superfly_FR]

Hi guys OoO today in meetings. Wishing you the best for this journey !
Have a Coke and a smile , whatever, and refrain to hit the report button too hard !
Cheers;
A.

In case of emergency : 24CEB24

[AngryEdmontonian]

I am seeing reports in other thread that the Carphoneware in the UK has sent back most of its z10 stock because they can't sell it but not a decent source? anyone know anything about this or have any sources?

I read this yesterday on CBC, I'm looking for the article.
Found it, one mminute...it's quotes from our buddy over at PacCrest

[AngryEdmontonian]

BlackBerry shares dip below $10 - Business - CBC News

Watch the wording, CBC jumps around with quotes so it's hard to tell sometimes who they are quoting making the story even more misleading.


From the Article:
Z10 phones don't sell in U.K.

Faucette also said U.K. retailer Phones 4U has sent back their stock of Blackberry Z10 phones from "as many as a third" of its locations and doesn't plan to stock it any longer.

"We believe BlackBerry is at risk of similar behaviour from other retailers and in other regions in the coming quarters, which we believe would impede the company's ability to regain scale," he said in a note, with an underperform rating on the company.

"Checks indicate continued deterioration of BlackBerry's business. We see downside to $6 per share and remain sellers."

On Tuesday, Heins outlined BlackBerry's strategy to become profitable once again at the company's annual meeting.

[Compaqee]

I read this yesterday on CBC, I'm looking for the article.
Found it, one mminute...it's quotes from our buddy over at PacCrest

Link please. Let's see what these boys are up to.....

[Kid Vibe]

Partnership PALEAAAASEEEEEEEE.

Gut tells me we will hit $8 soon. Balls of steel are starting to crumble.