1. talk2mikee's Avatar
    Do BB10 phones count as "subscribers" (considering they don't operate on BIS)? If not, we should expect a decline in subscribers as more people adopt BB10 devices. Further (if this is the case), Heins needs to spend some time explaining this fact in greater detail.

    BBRY sold approx. 5 million BB10 devices since release and subscriber base is down 4 million. Does this suggest that 4 million buyers were existing customers (with 1 million new customers)?

    This would also explain why BB will no longer report subscribers (as the count is irrelevant since BB10 devices aren't counted as subscribers).

    Can someone confirm this? I think it is important to understanding the context of today's earnings report.
    06-28-13 12:11 PM
  2. howarmat's Avatar
    They should be in that number (each device has a pin) but its never been really clear and now they wont be reporting the SUBs number as it is.
    06-28-13 12:22 PM
  3. Smiley88's Avatar
    Isn't subscribers tied to BES? BB10 does not require a BES plan like BBOS. BlackBerry only makes money from BES subscribers.
    06-28-13 01:01 PM
  4. sleepngbear's Avatar
    They make money on BIS subscribers, too. That's why people went nuts last quarter when they announced tiered subscriber plans.

    But as Matt says, they really have not been clear on the relationship between non-BES BB10 users and subscription numbers. A few things Brian Bidulka said lead me to believe that it's not the same as the old BIS subscriptions.
    06-28-13 01:37 PM
  5. DenverRalphy's Avatar
    If non-BES BB10 devices were not included in total subscriber numbers, BBRY would have made that very very clear today when it was revealed the subscriber base dropped by 4 million. They would have made it priority one to point that out so as to mitigate the falling numbers reported.

    Even if non-BES BB10 devices weren't included, the numbers would still be sad. With 2.7 million BB10 devices shipped, using gross assumptions that all 2.7 were sold (obviously not), and all 2.7 were sold only to non-BES (again obviously not), then that would still account for a 1.3 million loss.
    howarmat likes this.
    06-28-13 01:44 PM
  6. sleepngbear's Avatar
    Good points, @Ralphy. It's ugly no matter how you look at it.
    06-28-13 01:52 PM
  7. howarmat's Avatar
    i agree that if the 72 million didnt include the bb10 devices they would state it immediately. it helps explain away almost 4 million subs lost over the last 6 months
    06-28-13 02:25 PM
  8. talk2mikee's Avatar
    If non-BES BB10 devices were not included in total subscriber numbers, BBRY would have made that very very clear today when it was revealed the subscriber base dropped by 4 million. They would have made it priority one to point that out so as to mitigate the falling numbers reported.

    Even if non-BES BB10 devices weren't included, the numbers would still be sad. With 2.7 million BB10 devices shipped, using gross assumptions that all 2.7 were sold (obviously not), and all 2.7 were sold only to non-BES (again obviously not), then that would still account for a 1.3 million loss.
    Suggesting that BBRY would make anything a priority during a quarterly results call is to assume too much. Remember when RIM botched the explanation of service revenues?

    My point is this: BB10 devices don't generate service revenue because they are not on the BIS server (as all Legacy devices are). As such, BBRY doesn't collect service fees from the carriers for each BB10 device. So are BB10 device users considered "subscribers" or are we just "users?" We don't really subscribe to anything (in the traditional sense).

    I'd love for one of the Crackberry experts to chime in on this.
    06-28-13 03:40 PM
  9. talk2mikee's Avatar
    One other note: I think this is a communications problem that relates to Blackberry jargon. People who use these terms all the time don't think twice about using them with "outsiders" (i.e. the media, shareholders).

    The failure lies in the fact that to everyone else, these terms don't mean the same thing (or mean anything at all). Blackberry needs to define and explain these terms (service revenues, subscribers, etc.).
    06-28-13 03:46 PM
  10. talk2mikee's Avatar
    Per Chris Umiastowski:

    Yes they [BB10 devices] count [as subscribers]. There were lots of questions on this last quarter. This is the official correct answer.

    Posted via CB10
    06-28-13 05:12 PM
  11. lynxs_claw's Avatar
    Per Chris Umiastowski:

    Yes they [BB10 devices] count [as subscribers]. There were lots of questions on this last quarter. This is the official correct answer.

    Posted via CB10
    I'm confused then about two things here:

    (1) If BB10 is counted as subscribers then why did BB state on their call that moving forward they will no longer use this as a metric moving forward for all quarterly reports since it now deviates from their new business model with BB10. And I assume by new business model it means that BB10 devices are not tied to BIS and therefore are not counted as service revenue-based subscribers. I think it would be illegal for BB to report it as subscribership when no service revenues are generated from BB10 devices.

    (2) Does Apple and Samsung use this type of metrics? I assume no since they don't supply a paid service and just report out on the phones shipped for their quarter. So why should BB report out BB10 device that are not tied to service revenue as part of the subscribership numbers.

    To me BB10 devices should not be reported as subscriberships because they simply do not generate service fees just ARPU (Average revenue Per Unit) which BB stated last quarter that their revenue went up. The way I look at it they loss just over 1 million subscribers probably due to BBOS subscribers moving onto other platforms or picking up BB10 devices.

    ASIDE: Isn't BB still incurring expenses from launching all these phones during last quarter and with the slow ramp up that's what hit their profit margin (-67 million) and they were also able to grow their cash? The more I think about the quarterly report the less I'm worried about BB position. Everyone (the analysts in a big way) including myself was waiting for a homerun.. but in all fairness .. I has to ask myself does that make sense?? Other than the die hard BB fans in Q4 that rushed out to get the new product due to pent up demand and gave that push to the good bottomline ... isn't the Q1 results .. well .. realistic? If you don't have a BB right now .. it is going to be difficult to switch no matter how good the product is.. is everyone else just going to drop their contracts/phone app purchases and incurr the extra cost to move over to BB right now .. no. Yes the word has to get out.. BB does have a great product here .. and people are getting the message. Everyone I've shown my device to which are mostly Apple users can't say anything bad about the UI and most think its great. If this BB10 device wasn't good/great .. they wouldn't have sold any phones especially to users from other platforms that migrated over.

    You can call me crazy (since this type of scenario did happen to the company I worked for and we survived) it does take a good amount of time to get back into the game.. BB just needs to manage not to run out of money and keep pushing the features, updates and apps. I have a few stocks but this bump in the road is normal guys.. analysts don't have the difficulty of balancing the companies books .. cause if they're not carefully balanced .. the company dies.

    Please someone let me know if my logic is off.
    07-01-13 03:28 PM
  12. talk2mikee's Avatar
    Lynxs--
    Thanks for your post. The points you make are the reasons I started this thread. I agree with you. And I think there is a really big miscommunication from BlackBerry about this in their earnings call.

    I wish we could get Adam or Bla1ze to comment in this.

    Posted via CB10
    07-02-13 07:21 AM
  13. talk2mikee's Avatar
    Ok, so I checked Blackberry's financial report to see how they define the term "subscriber" and here's what I found:

    "...the Company has adjusted the methodology it uses to calculate the size of its subscriber base. Rather than calculating
    the total of all subscriber accounts that have an active status at the end of a reporting period and for which infrastructure access fees
    are thereby generated, the Company currently identifies its BlackBerry subscriber base as the total of all BlackBerry subscriber
    accounts that are provisioned to access BlackBerry services, regardless of whether the Company is receiving infrastructure access fees
    from each such subscriber in any given month.
    The Company believes this change will better reflect the base of BlackBerry users that
    may contribute to service revenues in the future, whether solely through infrastructure access fees or the integrated service and
    software offering being developed."

    So there you have it. Subscribers include BB10 devices that don't generate monthly "Service Access Fees" for Blackberry.
    07-02-13 02:15 PM

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