Originally Posted by
morganplus8 Hi Luke!
I agree with you, BB has a very difficult logistics problem here, it's not their fault but a difficult one to ressolve. It costs them $ 250/phone to build inventory, they may have ordered 1 million phones at a $ 250 million dollar commitment. Now, we see that 1 million phones are not enough to spread over as many countries as BB has in the past month. Thus leaving many without inventory. This problem is a nice one to have but BB needs to sell as many of these phones as possible to get the $ 450/phone revenue going. It's all about cash flow and they are spending money on advertising and product while trying to understand demand for their new line of phones. Then there is the biggest problem, they need to understand demand for two phones by the middle of March. Good luck with that! If they feel that Q10 will out sell Z10 by 3 to 1, they need a $ 750 million dollar commitment for Q10 alone. So you can see, they are out selling on Z10, ordering more, and, trying to make a call on the Z10 versus the Q10 for the March launch period. Who would want that job? They are literally trying to manage well over a billion in inventory for two launches in March.
Heins said to CNBC that he has "a challenge to his logistics staff to make enough phones for their needs". He didn't tell them he was personally responsible for demand, he did point out that they needed a plan in place and thought he had one with logistcs. We'll see in the weeks ahead.
To ask Heins to gear up for two phones and meet demand, plus a huge advertising campaign, and do it ll with their cash on hand is quite a tall order!!! We are talking about commiting billions on these two phones alone.
As for the stock, you are right, the chart is intact here, but it doesn't look good. I don't think we can maintain the rate of climb in the stock without some news from BB. They would have to confirm sales to some extent in order for us to rally hard from here and I'm not sure they will. As for an additional push, it can come from a partnership agreement at any moment thus all this concern is for not.