[wincyUt]

Excellent read; made my morning coffee one of my best ever.

PS: I copied and paste the article for some of those who may not be able to access the link. Also NOTE, the financial data spreadsheet did not post properly (for whatever reason).

BlackBerry Ltd (BBRY): BlackBerry Is Far From Dead. Right Sized, It Will Have A Profitable Future - Seeking Alpha

"Disclosure: I am long BBRY. I hold calls on BlackBerry (More...)

BlackBerry (BBRY) has been the talk of town for quite awhile now, with many pundits declaring it dead or dying. Maybe it is, but maybe not.

For a dead or dying company it shows signs of life. So far this year it introduced its new Z10, Q10, Q5 and Z30 devices, and, last quarter, it sold 6.8 million phones. It still has many fans as anyone who reads the comments on SA knows. The devices are solid, well designed, powerful and functional. BlackBerry still is the gold standard for security.

This weekend it will release its BBM messaging service on both Android and iOS platforms. I expect it will be very popular. It certainly is popular in our household. By next week, we will start to get information on how well it is received. I use it daily and would be lost without it.

Many observers compare BlackBerry to Apple (AAPL) or to Android. Why? There are a lot of other smartphone suppliers in the world who are not the subject of the negative press heaped on BlackBerry. Is there a reason why BlackBerry is so controversial? The company is not a fraud, is well managed, has a blue chip board of directors and sells products people need. Is there some reason every Wall Street commentator has to take a strip out of BlackBerry every time they get air time?

BlackBerry should be compared to suppliers its own size. How does it stack up against HTC (HTCCY.OB), ZTE (ZTCOF.PK), Yulong, Xiaomi, LG (LG), Lenovo (LNVGF.PK), and a host of other relatively small suppliers? I think it compares pretty well but have not seen such a comparison.

It has become very American to bad mouth BlackBerry and it is not a feature of the American ethic that I admire. Sure, there are a lot of Americans with sizeable short positions in BlackBerry who stand to profit if the firm fails and more power to them. But the degree to which American TV and press journalists think it worthwhile to proclaim the failure of a very fine firm on a daily basis is unfortunate. Maybe it sells newspapers or more advertisements. I don't know.

One SA member using the name Marcap makes it a point to post negative comments on BlackBerry daily, posting over 2,000 such comments so far by my count. He rarely comments on anything else. He (if it is a he) typifies the plague of negativism that BlackBerry is subjected to.

In any event, a slimmed down BlackBerry right-sized for its market is a company worth owning. The recent report that BlackBerry was on the verge of a further cut in staffing is not alarming - it is evidence the company is on the track to sustained profits through a streamlining of its operations.

What would a slimmed down BlackBerry look like? I have put together a simple model, and it looks pretty good using fiscal 2014 as a reference point.










BlackBerry currently spends $3.2 billion annually on General and Administrative expense. I have cut that back to $2.2 to $2.8 billion. I have pared the R&D budget to between $1.0 and $1.5 billion. And, I have assumed no BB7 or Playbook sales (since any sales would be at break even at best, in my view).

I have assumed annual device sales of between 16 and 24 million. The result is net income between $300 million and $1.4 billion. With a profitable base and a focus on those markets and customers where BlackBerry is valued, these results should be possible.

All the talk of a buyout is clouding the underlying picture. I use a BlackBerry. Many people I know use one. Many governments, police forces, fire departments and security agencies use BlackBerry's. A lot of corporations use BlackBerry's. Millions of people use BlackBerry devices. BlackBerry devices are unique and serve important functions better than any competing device. In the right market niche, its functions are unparalleled. It is not time to declare the company dead. Far from it.

I am long BlackBerry calls."

[BergerKing]

The numbers didn't fare so well on the copy and paste, for sure, but thanks for sharing! Took a couple of minutes to compress the page for readability, since the spreadsheet was fubar.

[fin2007]

a known pumper from SA.

He bought BBRY calls, if bbry does not go up quickly enough, he will be wiped out.

[wincyUt]

Lol!! I agree. Btw would you know other ways or technique of copying it better? Thank you too.

The numbers didn't fare so well on the copy and paste, but thanks for sharing!

[epyon52328]

So things are not as bad as some in the media make it out to be.

Sent from my Q10

[BergerKing]

Lol!! I agree. Btw would you know other ways or technique of copying it better? Thank you too.

I tried a couple of alternates that didn't work, so just cleaned it up for readability.

(Edit) I improvised, adapted, and overcame to get the data up there for you.

[birdman_38]

So things are not as bad as some in the media make it out to be.

We'll find out next Friday.

[wincyUt]

You do know that BlackBerry has forecasted a LOSS for the quarter, right? IMO things can only look better.

We'll find out next Friday.

[Javid Gozalov]

Great read! Has made my day

Posted via CB10

[Troy Tiscareno]

Many observers compare BlackBerry to Apple (AAPL) or to Android. Why? There are a lot of other smartphone suppliers in the world who are not the subject of the negative press heaped on BlackBerry. Is there a reason why BlackBerry is so controversial? The company is not a fraud, is well managed, has a blue chip board of directors and sells products people need. Is there some reason every Wall Street commentator has to take a strip out of BlackBerry every time they get air time?

BlackBerry should be compared to suppliers its own size. How does it stack up against HTC (HTCCY.OB), ZTE (ZTCOF.PK), Yulong, Xiaomi, LG (LG), Lenovo (LNVGF.PK), and a host of other relatively small suppliers? I think it compares pretty well but have not seen such a comparison.

This is Blair's key argument, and he writes like BB is just a company that sells phones, and that everyone else is too. There's a very VALID reason that BB is compared to Apple, Android/Samsung, and Nokia/MS: the ECOSYSTEM. If BB was using Android, or even WP8, then comparing BB to smaller OS-licensee phone makers would make sense, but in fact BB is trying to make its own OS, its own hardware, AND its own ecosystem of apps, media, and services. That's a fundamental difference between a company like BB and someone like HTC, LG, Xiaomi, or Huawei, who don't have to devote resources to an ecosystem or to create, maintain, and enhance an OS from scratch.

To make such a comparison to these small companies is to ignore a vital and relevant set of factors, and the reason the rest of the press doesn't make such comparisons is because it just doesn't make sense to do so.

You can always drill down your focus to one small area where your company has an advantage over everyone else, but few are fooled if you announce how great you are because of one small are in which you are ahead, when you ignore many other areas of far greater importance in which you are far, far behind.

That, to me, makes this a purely "fan-boy" article, and not an article that acknowledges the reality of the Big Picture.

[amazinglygraceless]

a known pumper from SA.

He bought BBRY calls, if bbry does not go up quickly enough, he will be wiped out.

Amazing. People are constantly screaming about the lack of positive are on BlackBerry in general and from Seeking Alpha in particular and when one is presented THIS happens. Some folks I guess are only happy when it rains.

Good article although the point could have been made without the anti-American nonsense.

[m1a1mg]

Which is why you don't listen to the folks at Seeking Alpha.

[cgk]

Which is why you don't listen to the folks at Seeking Alpha.

Yep - a lot of people have lost a lot of money listening to the sort of nonsense pumped out by people like Mr. Blair.

[fin2007]

a known pumper from SA.

He bought BBRY calls, if bbry does not go up quickly enough, he will be wiped out.

said he was a well known pumper from SA.

I guess now his calls are really worth ~0.

[Mikhou]

Which is why you don't listen to the folks at Seeking Alpha.

I Agree 500%


It's EZ at least for me:

The peoples that bring the company here are the same that run the company now.

Soit's EZ you know the result if you like it, buy BBRY Share if you don't trust them or don't like where they are just Sell it !!!


But Again if you like what ahhapen just buy more like some tell, it's a UNIQUE occasion to average #SARCASTIC

Same Peoples with same methods will deliver tha same kind of results next time... ;-)

[Fuzzballz]

Hilarious timing, OP

[m1a1mg]

Excellent read; made my morning coffee one of my best ever.

You might want to have something a bit stronger than coffee tonight. And stay away from SA. They aren't qualified for anything. Just SGOTI posting his/her opinion.

[wincyUt]

Hahahaha. I guess you are right. "Thems the brakes". Thanks for your concern but I'm very ok because in life you win some you lose some. NO PAIN NO GAIN.

You might want to have something a bit stronger than coffee tonight. And stay away from SA. They aren't qualified for anything. Just SGOTI posting his/her opinion.

[m1a1mg]

Hahahaha. I guess you are right. "Thems the brakes". Thanks for your concern but I'm very ok because in life you win some you lose some. NO PAIN NO GAIN.

Absolutely. Well played. Your attitude is way better than mine today.

[Bold_until_Hybrid_Comes]

Alec Saunders ‏tweeted this today:

@SimpleBerryRoy a company with 1.6 billion in sales, 2.6 billion in the bank and debt free is not "almost dead".



The denial has overcome these guys more than I imagined. What a joke.

[fin2007]

Alec Saunders ‏tweeted this today:

@SimpleBerryRoy a company with 1.6 billion in sales, 2.6 billion in the bank and debt free is not "almost dead".



The denial has overcome these guys more than I imagined. What a joke.

He should add "with 500+M cash burn in one quarter"

[wincyUt]

Just curious, what do you mean by $500+M cash burn in a quarter? Was there any mismanaged cash or funds? Or are you just saying that Cash balance decreased? If you don't mind, please elaborate.

He should add "with 500+M cash burn in one quarter"

[mkwb]

Alec Saunders ‏tweeted this today:

@SimpleBerryRoy a company with 1.6 billion in sales, 2.6 billion in the bank and debt free is not "almost dead".



The denial has overcome these guys more than I imagined. What a joke.

Agreed. It is amazing to see the irrefutable evidence and not look at it (the company's chances) rationally. A technology company's survival is based on innovation which is gauged effectively using a bell curve. If you have hit the inflection point towards the negative on innovation - as reflected by sales - it really is hard to recover, especially when sales are correlated to public perception of the company as a whole. Cash in the bank or not, if you are in a downward trend, those facts don't matter. The outcome is quite predictable, and BlackBerry is just another example, unfortunately. As they say, history is a good indication of future outcome.

I really wish BlackBerry would stop talking about cash in the bank and no debt. In a consumer driven market, focused on technology, it's all about the sales trajectory of not only it's individual products but sales as a whole. If you look at the last ten quarters revenue, it's quite easy to see where the company is headed: to the dustbin of technology history; an example for future Harvard business schools to disect what happens when you fail to innovate in the technology space.

Unless of course they are secretly working on a technology that will fundamentally shift the mobile phone market! But they aren't. And you know why? If they were, prospective buyers would have bought them by now. So all of you who have invalid hope of 'just wait for what they may have under wraps', get rid of it; that hope was BlackBerry 10 and it failed spectacularly. And, in case today's announcment was not clear enough for you, BlackBerry as you know it, is no longer, unfortunately.

Posted via CB10

[fin2007]

Just curious, what do you mean by $500+M cash burn in a quarter? Was there any mismanaged cash or funds? Or are you just saying that Cash balance decreased? If you don't mind, please elaborate.

If you look at their cost structure, it could be actually way more than 500M, though the cash balance shows only a 500M decrease.


Below is their last qtr's data, Research+Sales+Market+Admin is about $1.1B, without a big headcount cut, this is pretty much fixed.
Last qtr bbry had a gross margin of 34%, since this qtr most phone sold were bb7 phone, so let's assume it has a 30%(could be much lower).

1.6 * 30% = 480M. (gross margin).

480M - 1.1B = -620M, at least 620M lose. But they can use some accounting tricks to shadow this a little, still eventually you can find it out in the 10Q report.


Revenue $ 3,071 100% $ 2,808 100% $ 263
Cost of sales 2,029 66% 2,022 72% 7
Gross margin 1,042 34% 786 28% 256
Operating expenses
Research and development 358 12% 367 13% (9)
Selling, marketing and administration 673 22% 547 19% 126
Amortization 180 6% 172 6% 8
Impairment of Goodwill — 0% 335 12% (335)
1,211 40%

[pushpendrak]

i don't know about financial condition but BB10 OS is great and appreciated by my friends. It so smooth, i came from android.