[elucianic]

And as I type this, got a Florida Emergency Alert from the Governor of Florida.... via everbridge.net

Oh, yeah!... and what he said? rain, sun or both together?

[Chuck Finley69]

Oh, yeah!... and what he said? rain, sun or both together?

Depends on the part of the state.... LOL

[Corbu]

So, it's that time again...

Any questions for BB Management?

Please send them along by midnight Sunday, ET.

By the way, you can also get in touch directly with Investor relations, if you prefer.

Per usual, I'll do my best to get back to those concerned.

We'll make sure to ask about Seadog's theory, just to see if we can get an answer to it. Worth a try!

Cheers,

[BanffMoose]

So, it's that time again...

Any questions for BB Management?

Please send them along by midnight Sunday, ET.

By the way, you can also get in touch directly with Investor relations, if you prefer.

Per usual, I'll do my best to get back to those concerned.

We'll make sure to ask about Seadog's theory, just to see if we can get an answer to it. Worth a try!

Cheers,

Hi Corbu,

How about two simple questions:
1) Why should a potential customer choose BlackBerry?

2) Why should an investor choose to invest in BlackBerry?


Thank you!

[BanffMoose]

Depends on the part of the state.... LOL

And if you don't like it, wait 5 min.

[Dunt Dunt Dunt]

July 2, 2020

CV 18-1944-GW-KSx

BlackBerry Limited v. Facebook

Summary

(1) the parties’ claim construction disputes with respect to the terms “mode selector” and “message generator” would be found MOOT;
(2) the Court would GRANT the portion of Defendants’ Motion for Summary Judgment as to Non-infringement of the ’961, ’120, and ’634 Patents and Invalidity of the ’961, ’634, ’236, ’713, and ’250 Patents (Motion, Docket No. 540) that was previously deferred as it relates to the ’236 Patent;
(3) the Court would DENY the portion of Defendants’ motion to stay that was previously deferred as to the ’236 Patent (see Docket Nos. 501 (motion), Docket Nos. 652, 655 (previous orders deferring ruling on motion as to ’236 Patent)) AS MOOT;
(4) any request for entry of partial final judgment as to the ’236 Patent under Rule 54(b) in advance of the determinations on the remainder of this case, including as to the stayed patents, would be due within seven days of a final ruling.

Ruling:
https://www.courtlistener.com/recap/...3149.669.0.pdf

And whats the summary of the summary?

[Dunt Dunt Dunt]

Oh, yeah!... and what he said? rain, sun or both together?

He said COVID is dangerous and everyone at risk should be careful.

Oh and give all those tourist a big hug, and party like it's 1999.....

[Dunt Dunt Dunt]

Good to see BlackBerry is along for the ride this morning....

[FeitaInc]

A thing that has been bugging me was the off hand comment the CFO made on the most recent earnings call when they discussed the SP. he said something like “we have already recovered 80% of the drop...”

The reason why that is bugging me is that it is probably factually correct, but it is both belittling the problem and in general it is such a mind numbingly erroneous and mis-characterization of the abysmal SP performance we’ve seen the last couple of years.

Sorry. Just had to get it out.

[EchoTango]

A thing that has been bugging me was the off hand comment the CFO made on the most recent earnings call when they discussed the SP. he said something like “we have already recovered 80% of the drop...”

The reason why that is bugging me is that it is probably factually correct, but it is both belittling the problem and in general it is such a mind numbingly erroneous and mis-characterization of the abysmal SP performance we’ve seen the last couple of years.

Sorry. Just had to get it out.

Yeah, I heard that to and just chalked it up to ER exuberance. However, you're right FeitaInc to point out the absurdity of the comment given the abysmal SP historical overall performance. I felt somewhat the same when JC waxed on about how the BOD and Management were keenly aware of the poor SP performance and really didn't provide much more, other than rather empty commiserations.

[Chuck Finley69]

A thing that has been bugging me was the off hand comment the CFO made on the most recent earnings call when they discussed the SP. he said something like “we have already recovered 80% of the drop...”

The reason why that is bugging me is that it is probably factually correct, but it is both belittling the problem and in general it is such a mind numbingly erroneous and mis-characterization of the abysmal SP performance we’ve seen the last couple of years.

Sorry. Just had to get it out.

Yeah, I heard that to and just chalked it up to ER exuberance. However, you're right FeitaInc to point out the absurdity of the comment given the abysmal SP historical overall performance. I felt somewhat the same when JC waxed on about how the BOD and Management were keenly aware of the poor SP performance and really didn't provide much more, other than rather empty commiserations.

Are you all being serious? These people are doing the job for the people that hired them. If you’re not going to be creative writing calls and puts to generate income, you might as well sell your shares. Nobody but yourselves are looking out for y’all.

Sorry to be so blunt.

[Redzinaldas]

Some opposite point of view..

https://www.cantechletter.com/2020/0...akes-how-much/
BlackBerry CEO John Chen makes how much?!

[FeitaInc]

Are you all being serious?

I'm dead serious. It was not a major point, and probably not worth focusing too much on (and if I'm to think of the serenity prayer, it's definitively not something I can influence, so I shouldn't have brought it up).

These people are doing the job for the people that hired them.

Those people would be the shareholders, of which I am one. I realise that I'm such a minor shareholder that in the CFOs view I probably don't qualify, but still..

If you’re not going to be creative writing calls and puts to generate income, you might as well sell your shares. Nobody but yourselves are looking out for y’all

While I agree that nobody but me is looking out for my interests and that I probably could do a lot better by writing calls and puts to generate income, to say that I can't do that and still hold management responsible for the performance (or lack thereof) of SP performance relative to industry peers or offer comments to that effect is not a view I describe to. sure, if (recent) past performance is any indication of future performance, to think that BB's SP will increase materially might not be a consensus view, but my comment was to the tone and sentiment that that tone could indicate that management has.

Sorry to be so blunt.

we're playing different games, so that our commentary and views om what it makes sense to comment on are different is no surprise.

edit: just in case it wasn't clear, I do agree with you chuck, consider my post venting. :P

[Rice Dawg]

FeitalInc and EchoTango are right. Arguably what's been most disappointing is the cognitive dissonance of BlackBerry. I understand it's the job of executives and their IR team to put a positive spin on everything, but part of what attracted me to the company was John Chen's unusually straight-shooting nature when he first came onboard. That seems to be ancient history now.

To wit, during the Q1 call, he claimed all business units except QNX performed inline or better than expectations. But why is ESS's revenue growth being flat considered an "inline" performance by Chen? Why is Cylance declining by ~5% considered "slightly ahead of expectations"? This begs the question whether or not our CEO really should have higher expectations.

Some have argued flat/slightly down is an amazing achievement in this environment. I would argue that's true if BlackBerry was an airline or a hotel. But BB is an enterprise software company. Blaming Covid-19 is acceptable for QNX royalty revenues as it depends on cars being shipped. For cybersecurity SaaS, however, it's a cop-out. AtHoc and Cylance and UEM are all supposedly critical infrastructure to enable Work From Home for enterprises.

It's clear that their sales force "glitch" last year could not have occurred at a worse time as BlackBerry have not been able to capitalize on a black swan event that should have massively benefited them. Instead they're scrambling to hire enough sales reps (100 reqs currently open according to Chen on the call) and only recently hired a VP of Corporate Marketing (probably Brian Clevenger if my LinkedIn sleuthing is on point).

All of their peers are reporting accelerating growth in this environment where WFH is driving so much demand (personally I am being bombarded by Crowdstrike and ServiceNow ads across the internet, each touting their essential services to enable this WFM paradigm shift -- those are companies with marketing groups who know how to carpe diem). Even legacy WFH software companies like Citrix have hit all-time highs. For a stat that'll really make your blood boil, Zoom, Okta, DocuSign, DataDog, and Twilio are all up between 149% and 293% this year. Of course, they may very well be overvalued, but this speaks to sentiment, i.e. investors and customers appropriately associate them with a business that is booming.

I went through JPMorgan's 2020 CIO Survey recently, and in 100+ slides, there was not one mention of BlackBerry anywhere. Cylance was mentioned as a "standout vendor" once, by 0.8% of the CIOs surveyed, but down from 2.5% last year and 2.6% the year before. Crowdstrike on the other hand was mentioned by 5.4%, up from 1.6% last year and 1.3% the year before. The takeaway is BlackBerry is simply no longer on any CIO's radar. It's gone from a toxic brand to an invisible brand, taking Cylance down with it. BB may be dominant in some branches of government and in big global banks, but that's a limited TAM that they're quickly saturating. There's been minimal penetration or awareness in enterprises outside of those verticals. How CMO Mark Wilson still has his job is a mystery to me.

Anyway, I'll try to end on a more positive note. Namely, BB shares hasn't reacted terribly negatively since earnings, a possible sign that investor expectations have finally reached bottom since it got nuked last September.

The problems with their go-to-market effort has been an acknowledged festering sore since 2018 when they replaced Carl Wiese with Bryan Palma who then promptly left in under a year. Now with new president Tom Eacobacci, hopefully third time is the charm. The glass half-full interpretation is that they (still) have a lot of market share to chase after. The same JPM survey highlights Remote/WFH Tech as the #1 spending increase for CIOs impacted by Covid-19, with Security being #2.

After years of acquisitions, Spark has finally been cobbled together and BB is finally reporting the bare minimum SaaS metrics that all of their peers report. Over the next few quarters, they will be under the microscope, as any upturn will first show up in ARR, DBNRR, and churn numbers. And with the company now committed to reporting them, there should be incentive to improve them. This is the beginning of John Chen's endgame, who now has three years left in his contract to make this hodgepodge strategy work with the stock already seemingly pricing in failure. As the old saying goes, the secret to happiness is low expectations.

[Corbu]

Awesome stuff that makes this board still relevant, Rice Dawg.

Thanks.

[FeitaInc]

I did some light reading yesterday about car OS and infotainment systems. from BBs perspective, it seems like the market is signalling that there is an incoming shift from QNX to mainly AGL underway, but also to Android Automotive. that BB keeps banging their drum about how many cars that are currently using QNX may indicate this as well.

For AGL, Forbes has written an ok article about Audi's coming switch. a line that has made it's way into quite a few of the articles I read is the following: "AGL addresses 70% of OS development work, while the remaining 30% can be developed by OEMs. This facilitates development progress and cuts costs significantly.l. that part about the OEMs having to write 30% themselves would really give me pause if I were the CTO of an automotive group, as I assume it isn't the easiest 30% that is left. furthermore, in this article "...Christian Senger, who is responsible for VW Group's Digital Car and Services division..." states that within 2025 VW will have about 5-10 000 employees working on their new car platform. The cost of getting something like the above of the ground, at some point it seems like it would be way less expensive to just buy BB.

it seems Volvo and Polestar (aka Geely) is going the Android Automotive route. They have partner with Google and have been featured on their developer conference. The system that Volvo/Polestar uses has been built by Aptiv. given that the typical design win -> car on the road is 2-5 years, this announcement of a partnership between BB and Aptiv (then Delfi) makes me very curious to know if Volvo/Polestar is using QNX hypervisor to run Android just as their infotainment system.

Ford has famously partnered with QNX and has even hired 400 former BB employees.

All in all, I have no clear overview of how QNX is positioned and how the market will shake out. JC has said that market share decline is not unexpected, but that an increase in ARPU for the customers they keep (by providing ADAS and the like) is also in the cards.

If anybody has some insights that would be great.

[Dunt Dunt Dunt]

If anybody has some insights that would be great.

Think @app_Developer has some real world insights on QNX now.... and maybe where Automotive might be going in the short term.

My guess is QNX is here to stay for a while in automotive... but there is no doubt the competition is heating up throughout the world. That's going to limit growth as well as profits. Biggest concern... how small QNX is and how little BlackBerry has to spend on R&D. While AGL is being supported by a growing group of vendors who will all benefit from it's ongoing development. QNX needs a new owner with much deeper pockets...

Too Tesla has change the map that Auto Makers have used for decades.... many are looking to follow their path to some degree or another. A big part of that change is the overall computer control system, and the software that runs it "all". That could also affect QNX in the coming years... no more dozens of licences in one auto.

[bb_po]

...
If anybody has some insights that would be great.

I don't have insights on which OS will be the prominent one in the future. However, I believe BB will continue to have a strong footing in the auto security market. Because major auto countries adopted an agreement in UN in 06/2020 to require cybersecurity guarantees for connected cars, https://www.unece.org/info/media/pre...icles/doc.html. It is not really new news since it was a month ago, but it is featured in WSJ today, https://www.wsj.com/articles/u-n-rul...rs-11594287001.

As the UN article pointed out, there are ~150 ECUs and ~100M lines of software code (4X a fighter jet) now, and cars are most likely going to be more complex in the future. One of the problem with AGL or Android is the level of security really depends on how well and how much the developers know and care about security. And the security is as strong as the weakest link. Furthermore, connected cars are in some ways even more complex than fighter jets. Cars and jets contain parts and software from multiple companies, but jets are mostly communicated via a single network, the military network. Cars could be downloading driving system module update via cellular network from Tier 1 or music apps from Apple store via wifi, ie. multiple sources via multiple networks. If BB's QNX-related products (QNX, Jarvis, Hypervisor, ...etc.) are as good in security as advertised (seem like it is based on the design wins, and revenue and ARPU growth), now this is a regulations, BB should have a good footing in this market.

2 caveats though. Firstly, I am not an expert in automotive security, so I do not know whether these regulations are just superficial ones (ie. not generating incremental revenue/profit) or is it really going to make security a really regulatory requirement. The only I can say is, at least regulatory bodies around the world have started the discussion.
Secondly, if Mckinsey's numbers are right, which I have my doubt, doubling in 10 years implies CAGR of 7%...which is really not impressive at all...

[Dunt Dunt Dunt]

I don't have insights on which OS will be the prominent one in the future. However, I believe BB will continue to have a stronge footing in the auto security market. Because major auto countries adopted an agreement in UN in 06/2020 to require cybersecurity guarantees for connected cars, https://www.unece.org/info/media/pre...icles/doc.html. It is not really new news since it was a month ago, but it is featured in WSJ today, https://www.wsj.com/articles/u-n-rul...rs-11594287001.

As the UN article pointed out, there are ~150 ECUs and ~100M lines of software code (4X a fighter jet) now, and cars are most likely going to be more complex in the future. One of the problem with AGL or Android is the level of security really depends on how well and how much the developers know and care about security. And the security is as strong as the weakest link. Furthermore, connected cars are in some ways even more complex than fighter jets. Cars and jets contain parts and software from multiple companies, but jets are mostly communicated via a single network, the military network. Cars could be downloading driving system module update via cellular network from Tier 1 or music apps from Apple store via wifi, ie. multiple sources via multiple networks. If BB's QNX-related products (QNX, Jarvis, Hypervisor, ...etc.) are as good in security as advertised (seem like it is based on the design wins, and revenue and ARPU growth), now this is a regulations, BB should have a good footing in this market.

2 caveats though. Firstly, I am not an expert in automotive security, so I do not know whether these regulations are just superficial ones (ie. not generating incremental revenue/profit) or is it really going to make security a really regulatory requirement. The only I can say is, at least regulatory bodies around the world have started the discussion.
Secondly, if Mckinsey's numbers are right, which I have my doubt, doubling in 10 years implies CAGR of 7%...which is really not impressive at all...

I suspect Linux developers know a "little" about security. As Linux runs most the networking and and server hardware out there.

In the end it's all just software... BlackBerry doesn't have any magic solutions, they have always been a tiny software company. QNX's position of dominance, is based on Dan Dodge being in the right place at the right time twenty years ago and their later association (ownership) by Harmon - a major partner for automotive OEMs.. Going forward the "winner" is the one that can offer the simplest solution (that meets the required security standards) for the best price. In the long term, by it's very nature... that's more likely to be AGL - as it has more money behind it. Now as long as automobiles remain a compilation of separate "systems", I suspect QNX will have several licenses per car. But 5 or 10 years from now??

But I wouldn't be surprised if Google doesn't own the User Interface pretty soon... what they have is what most folks want, and they can pour millions (if not billions) into the perfect solution. But not sure their plans extend beyond that. They really don't care about operating systems, other than how those allow them to caputure "users". But if they really want it....

Apple... think they are going the Tesla route, they aren't going to offer systems to other OEMs, they will be their own OEM. (you guys taught their phones were expensive )

[app_Developer]

I worked in banking before and automotive now. The actual security threats that we and our customers face have very little to do with the kernels anymore. The fight is much further up the stack now., and has been for years.

We use QNX in systems because we have for a long time. It’s not because it gives us any real advantage in security. It doesn’t, because the actual vulnerabilities are elsewhere. We use it because these systems have been evolving over 20 years now or more and when they were started QNX was the right choice and hardware was extremely limited at the time.

What QNX lacks is modern development tools. They were behind a decade ago. Now they are even further behind. And the support from partners like nvidia is not as strong as their support for Linux. That’s expected when you consider that 99% of commercial nvidia based applications are also running Linux (all the big ML shops and cloud ML platforms).

So the new work in self-driving or totally new infotainment systems or the things that we do in our Labs are often on AGL because you get modern dev tools, and great support from vendors, etc. Also as people come from schools, Linux is what they know. Example: we hire developers who did autonomous racing series in college. In the US and in Europe these kids who are doing autonomous racing are using nvidia and Linux. So obviously they bring those skill sets with them. Also if we hire from any of the big AI/ML companies, those people are also going to be more comfortable on Linux and are used to the quality of dev tools that we have in that world.

So I don’t see QNX revenue declining quickly. Most cars will continue to have it in there for some time. But I don’t see it growing much either. Yes, BB works with companies on designs and experiments in autonomous, etc. but they winners in that space may or may not actually use QNX. The hardware is different now than it was 20 years ago. The tools are very different and QNX doesn’t give us any real advantages anymore except where we’ve already been using it for a long time.

To be clear, BB will see some growth from the fact that legacy infotainment systems are now in even the lowest end of our product segments. But I think if we look back in 2021 or 2022 we’ll see them losing traction in the high end segments.

[FeitaInc]

thanks @app_Developer!

IWhat QNX lacks is modern development tools.

this is just the type of thing that they shouldn't allow to happen. it's very much a "how do you go broke? gradually then suddenly" type of a thing.

[app_Developer]

thanks @app_Developer!



this is just the type of thing that they shouldn't allow to happen. it's very much a "how do you go broke? gradually then suddenly" type of a thing.

Or take a different strategy. Kernels and dev tools are a commodity. Move on. They are way too small a company to support their own bespoke tools.

Spark is all about making Cylance serve the QNX and IoT story. But that story doesn’t solve my problems, it solves BlackBerry’s problem of how to stitch all their various products together. Someone said earlier that CIOs are not considering BB in their plans. Well, I can tell you here in the OCTO, where I need to manage secure systems for our in-car experiences, BB is trying to sell us a 2010 answer to a 2025 problem. And half their sales pitch is about them, not us.

The story they are stitching together and what they are doing with Cylance doesn’t address my problems as well as other vendors do. I don’t think I’m alone in that. They should let Cylance be Cylance and go after the huge TAM that doesn’t care about QNX and rolls their eyes at “IoT”.

[FeitaInc]

Or take a different strategy. Kernels and dev tools are a commodity. Move on. They are way too small a company to support their own bespoke tools.

Spark is all about making Cylance serve the QNX and IoT story. But that story doesn’t solve my problems, it solves BlackBerry’s problem of how to stitch all their various products together. Someone said earlier that CIOs are not considering BB in their plans. Well, I can tell you here in the OCTO, where I need to manage secure systems for our in-car experiences, BB is trying to sell us a 2010 answer to a 2025 problem. And half their sales pitch is about them, not us.

The story they are stitching together and what they are doing with Cylance doesn’t address my problems as well as other vendors do. I don’t think I’m alone in that. They should let Cylance be Cylance and go after the huge TAM that doesn’t care about QNX and rolls their eyes at “IoT”.

there's your question to BB/JC @Corbu.

[Corbu]

there's your question to BB/JC @Corbu.

Sorry mate... That was last week! ;-)

[FeitaInc]

They should let Cylance be Cylance and go after the huge TAM that doesn’t care about QNX and rolls their eyes at “IoT”.

Just to break this down even further, what type of companies would that be?