04-03-13 07:41 PM
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  1. Zarpan's Avatar
    It is interesting - I assumed cost cutting, and that has now been confirmed. This morning, just before the numbers, I was thinking about that, and wondering how much it would drop. I posted an article a little while back where Heins boasted that the cast would be "strong". This made me think it might not be down much, and I was thinking about how I felt about that. I actually am a little disappointed - I think they should have blown out tons of cash in one incredible spectacle of a launch. This overall is very defensive and managed to me, I think they want to "survive" BB10, and hope for better fortunes later.
    I think they mentioned that marketing spend was expected to increase by 50% in Q1, so that doesn't really sound defensive to me. It makes sense that the cash position would not have gone down much in Q4, since the product was only available for a meaningful amount of time to countries accounting for 20% of BlackBerry's subscriber base. Most of the advertising spend for Q4 would be directed to those countries, which are relatively small compared to the overall base.

    I'm sure they would have booked a number of advertising campaigns prior to Q1, but those would not affect the cash position nor the earnings for this quarter. If they booked an ad campaign in February to run in April, I believe it would affect Q4 accounts payable, but Q1 cash balance and Q1 marketing expense and consequently Q1 income.

    Their accounts payable did increase by $400 million vs Q3, so that's probably a combination of Z10 production and upcoming marketing campaigns.
    03-28-13 06:11 PM
  2. a1s2d3f4g5's Avatar
    Peter9477- you are making some insightful points in this thread. I got the impression that subscribers does not count bb10 now based on WSJ commentary of the earnings call and a transcript of a CNBC interview later. But I do not have a definite answer.

    Posted via CB10
    peter9477 likes this.
    03-28-13 06:32 PM
  3. JonCBK's Avatar
    I think Chris in his post said that Z10's are being counted as subscribers. So the term basically just means "Blackberry Users" now. And since subscriber fees doesn't seem the focus of the business model, counting the non-paying users as subscribers is probably fine.

    Personally, I was surprised at the modest move in the market today. I kind of read this earnings release as an unequivocal proof by Blackberry that they are poised to be a lean mean cash generating machine going forward. Sure they only made a $94 million this quarter (but correct me if I'm wrong, but is that more than Facebook, Netflix and Amazon combined during their last quarter?). But if they can generate income like that with just a few weeks of sales of the Z10, wow, what are they going to do six months from now when they have good BB10 devices in every market? I could see them doing billion dollar income quarters within a year. I just don't see how a company that should be able to do that trades at a $8 billion market cap.
    BBInPlay and Acumenight like this.
    03-28-13 10:06 PM
  4. kill_9's Avatar
    Positives- profit per share, cash up to 2.9 billion, 370,000 playbooks shipped, marketing budget to increase 50% q1

    Negatives- subscriber loss of 3m, revenues down slightly

    Did not release sell-through figures

    Posted via CB10
    BlackBerry 10 smartphones don't need a subscription in the traditional sense but the number of users can be tracked via BlackBerry ID accounts. Eventually there will be no subscribers in terms of BIS and BES data plan fees but application and media content sale revenues will still contribute to their coffers. The reduction in traffic handled by BlackBerry's NOC should lead to cost efficiencies through hardware and staff reductions.

    Posted via CB10 from the BlackBerry Z10
    richardat likes this.
    03-28-13 10:50 PM
  5. richardat's Avatar
    I think they mentioned that marketing spend was expected to increase by 50% in Q1, so that doesn't really sound defensive to me. s.
    Yes, they did, though they also mentioned that they did not think it should affect their balance much - so obviously, it's something they are not only cognizant of, it is their intention to keep it this way. Having said that, I might go along with that strategy now. I wouldn't have before. I think the odds of blockbuster sales is pretty close to 0 now....perhaps there never was that possibility anyways, but I would have tried.

    It may be time to get defensive: try to get the 10-20mil, conserve cash, and hope to expand on that in the next cycle.
    03-29-13 01:46 AM
  6. richardat's Avatar
    BlackBerry 10 smartphones don't need a subscription in the traditional sense but the number of users can be tracked via BlackBerry ID accounts. Eventually there will be no subscribers in terms of BIS and BES data plan fees but application and media content sale revenues will still contribute to their coffers. The reduction in traffic handled by BlackBerry's NOC should lead to cost efficiencies through hardware and staff reductions.

    Posted via CB10 from the BlackBerry Z10
    Yes, it will be interesting though. They need to maintain those services for the developing nations, since NA has largely already abandoned BIS, there wont' be any loss there. The nice thing for BB is that they can still get their BIS revenue in the countries where z10 isn't an option. The downside is, the erosion there appears to have begun in earnest. One of the beauties of BIS was that it cost relatively little, which is why it is a nice cash cow for BB even though hardware sales make them more revenue.
    03-29-13 01:52 AM
  7. m1a1mg's Avatar
    Edit: I found confirmation that I'm right in a followup question. "Tim Long: Okay, so its not related to the millions, its related to to date shipments. Thorsten Gerhard Heins - CEO Yeah, kind of."

    Basically it's very clear that was not meant to be strictly applied to the Q4 number of 1M shipped.
    The bolded bit is NOT what I want to hear from a CEO. It seems as though he's talking around something.
    richardat likes this.
    03-29-13 06:50 AM
  8. texazzpete's Avatar
    Your a complete moron!!! you don't think 1 million Z10 sales is impressive for not even a full month? The phone was for sale in less then 6 countries. The Z10 will be released in more then 100 countries in the next 1.5 months. Your a crackhead! and not the berry kind!!!
    A full month for the UK and very nearly a full month in Canada. At least a full week of sales in all their key markets except for the US.

    Keep that in mind

    Sent from my GT-N7100 using Tapatalk 2
    richardat and BBInPlay like this.
    03-29-13 07:32 AM
  9. peter9477's Avatar
    The bolded bit is NOT what I want to hear from a CEO. It seems as though he's talking around something.
    Given the caveats with which they prefixed their answers to that series of questions, I would say it's quite clear they're "talking around something", and admitted it. They didn't have the exact number he wanted, and tried to give him an idea with a rough number they did have. In context it didn't seem to me to be a concern.

    Here's the only rationale conclusion on the 1M that were shipped: they've almost all sold by now. Does anyone seriously think they have 400K Z10s from that first month still sitting in inventory in warehouses in Canada and the UK?
    03-29-13 07:33 AM
  10. Enyigma's Avatar
    The numbers show BB has halted the bankruptcy train but has yet to prove they have a path to future profitability. I agree with the posters that we will need information from the coming three quarters to see if BB can once again become a growth story and a solid no. 3 player.

    Most worrisome to me is the departure of Mike Lazaridis since he has been the visionary that was coming up with the ideas for the future. Such people are few and far between (witness Apple after the death of Steve Jobs). Replacing ML will be a challenge and if the visionary drive does leave the company, then we are left with good solid management which may indeed result in sensible financial paths being chosen which might eventually be licensing, sale of the hardware business,partnerships or sale of the company.

    What is left is a company that would remain small but profitable making it an attractive takeover target. This will be good for shareholders who will make some money and very bad for the bears. My hope is that BB can grow again and evolve into a large tech company, but am definitely concerned at this time about its longer term prospects as an independent company.
    richardat likes this.
    03-29-13 08:09 AM
  11. kill_9's Avatar
    Yes, it will be interesting though. They need to maintain those services for the developing nations, since NA has largely already abandoned BIS, there wont' be any loss there. The nice thing for BB is that they can still get their BIS revenue in the countries where z10 isn't an option. The downside is, the erosion there appears to have begun in earnest. One of the beauties of BIS was that it cost relatively little, which is why it is a nice cash cow for BB even though hardware sales make them more revenue.
    BlackBerry needs to clearly state the distinction between these subscriber groups (BIS/BES subscribers versus BlackBerry ID subscribers). The growth number will be BlackBerry ID accounts since every BlackBerry user requires a BlackBerry ID to take advantage of many of the services offered by BlackBerry. Once BlackBerry stops reporting the BIS/BES subscriber count, which is misleading in light of their stated intention of eliminating traditional BIS/BES service revenues over time, and report only BlackBerry ID accounts (active), the analysts will have an objective metric by which to measure BlackBerry's user base. BlackBerry could even report an additional metric of the average number of BlackBerry devices per account; the same BlackBerry ID can be used for multiple smartphones and tablets. And Thorsten Heins needs to convince the Board of Directors to take the company private - no venture capital firms allowed; offer shareholders USD20.00-25.00 per share to buy back all outstanding shares.
    richardat likes this.
    03-29-13 08:21 AM
  12. kill_9's Avatar
    Given the caveats with which they prefixed their answers to that series of questions, I would say it's quite clear they're "talking around something", and admitted it. They didn't have the exact number he wanted, and tried to give him an idea with a rough number they did have. In context it didn't seem to me to be a concern.

    Here's the only rationale conclusion on the 1M that were shipped: they've almost all sold by now. Does anyone seriously think they have 400K Z10s from that first month still sitting in inventory in warehouses in Canada and the UK?
    The reported one million BlackBerry Z10 smartphones sold during the quarter were obviously sold to end-user and organizations deploying the new BlackBerry smartphone. The addition one million devices bought by "a mysterious party" has been explained to be a distributor and as such probably represents a just-in-time (JIT) delivery agreement between BlackBerry and the distributor serving multiple retailers and/or carriers. No inventory of one million devices is being staged in a warehouse; that would violate every supply chain practice under the sun. Did the order for those one million BlackBerry 10 devices from the distributor occur before or after 4Q2013?
    03-29-13 08:28 AM
  13. unbreakablej's Avatar
    Suddenly remembered one of the bearish commentes estimating only 35k sold when it was launched in UK / canada. What a laugh.

    Posted via CB10
    03-29-13 08:38 AM
  14. Admorris's Avatar
    Given the caveats with which they prefixed their answers to that series of questions, I would say it's quite clear they're "talking around something", and admitted it. They didn't have the exact number he wanted, and tried to give him an idea with a rough number they did have. In context it didn't seem to me to be a concern.

    Here's the only rationale conclusion on the 1M that were shipped: they've almost all sold by now. Does anyone seriously think they have 400K Z10s from that first month still sitting in inventory in warehouses in Canada and the UK?
    Actually I think that's a very real possibility. The fact that the CEO either has no idea how many actually sold, or knows but doesn't want to reveal that number is nothing but a bad sign. I'm not sure how anyone without rose colored glasses could look at it any other way.

    Sent from my LG-E970 using Tapatalk 2
    m1a1mg and richardat like this.
    03-29-13 08:51 AM
  15. mrm_090's Avatar
    Kill_9, I believe that 1M came after Q4.

    This is an interesting post. I am not a finance genius but maybe someone can clarify for me why bbry shares closed in the red yesterday after such positive financial results. I would've imagined a very green day for the stock. Am I missing something?

    Posted via CB10
    03-29-13 08:59 AM
  16. Wiki Cydia's Avatar
    Your a complete moron!!! you don't think 1 million Z10 sales is impressive for not even a full month? The phone was for sale in less then 6 countries. The Z10 will be released in more then 100 countries in the next 1.5 months. Your a crackhead! and not the berry kind!!!
    It seems like 99 times out of 100 when I read someone on a forum or Twitter using the words "moron" or "*****" they use "your" when they should be using "you're." I'm sure it's a coincidence.
    03-29-13 09:36 AM
  17. texazzpete's Avatar
    Suddenly remembered one of the bearish commentes estimating only 35k sold when it was launched in UK / canada. What a laugh.

    Posted via CB10
    That was for the first weekend. And it's apt. there's nothing in this sales report that gives the confidence that any more than 400K units were sold in a month in the UK/Canada market combined.
    03-29-13 09:45 AM
  18. RubberChicken76's Avatar
    What I read is that they lost subscribers faster than they could convert them into BB10 platform users. Is this a concern?
    They gained 55% of 1million from other platforms to BB10; in the meantime they lost/failed to convert about 3~4 millions to other platforms.
    For most of the last two years, BlackBerry has been losing users pretty rapidly in the US, but then gaining them pretty rapidly in other markets. Until two quarters ago, the international growth made up for the losses in the US and then some. Last quarter, the international story wasn't enough to prevent overall subscriber loss because US losses continued. It has been suggested they've flatlined or lost users in other markets, while still growing in key ones.

    This past quarter was a challenging one regardless. The world knew BlackBerry 10 was coming and they went into Christmas with a) old products; and b) the world knowing something knew was coming. I give them a bit of a pass on subscriber loss this quarter, but if we're still seeing shrinking in the quarter that ends in August (when Z10 and Q10 are fully rolled out), I'm worried.
    03-29-13 10:38 AM
  19. RubberChicken76's Avatar
    it's total horse puckey Wiki Cydia. He knows exactly how many were sold - just like Apple or Samsung do. The inability to track less than 1 million phones is a funny excuse to fall back on though :-)
    You're completely right that he knows the sell through. I think it was more a case of trying to assign a percentage to shipments since it's all over the map for Z10 right now as countries ramp up, channels ramp up, demand is initially high or miscalculated in spots etc.
    03-29-13 10:43 AM
  20. RubberChicken76's Avatar
    A full month for the UK and very nearly a full month in Canada. At least a full week of sales in all their key markets except for the US.
    I though quite a few markets rolled out after the end of the quarter too. Regardless, not really firing on all pistons yet.
    Regardless, this quarter and next will be the really telling ones. Full global availability of Z10 and full global availability of Q10 will be the real indicator of success or not of the platform.
    03-29-13 10:47 AM
  21. texazzpete's Avatar
    I though quite a few markets rolled out after the end of the quarter too. Regardless, not really firing on all pistons yet.
    Regardless, this quarter and next will be the really telling ones. Full global availability of Z10 and full global availability of Q10 will be the real indicator of success or not of the platform.
    But then they've got to deal with the massive attenuation factor of the Galaxy S4. Every US and UK carrier will switch the bulk of marketing and promotion to the S4 and iPhone to try and catch as many subscribers as possible.

    I don't mean to sound pessimistic...

    Sent from my GT-N7100 using Tapatalk 2
    03-29-13 11:03 AM
  22. Enyigma's Avatar
    This is an interesting post. I am not a finance genius but maybe someone can clarify for me why bbry shares closed in the red yesterday after such positive financial results. I would've imagined a very green day for the stock. Am I missing something?
    I was reading somewhere else that the spread between the current share price and consensus target price per share is greater with BB/BBRY than it is with any other major tech firm. The explanation given is that there are a large number of optimistic shareholders holding on to their stock with the belief that BB/BBRY shares will rise further in the coming quarters notwithstanding that the company fundamentals do not yet justify this optimism. The analysts are essentially saying BlackBerry is a speculative play with strong beliefs on both the bull and bear sides.

    There was nothing in the numbers that convinced either the bulls or bears to back off their position, hence the relatively unchanged price per share.

    Apparently, BB/BBRY shares are still trading below book value (what the company could be sold for if broken up and sold for its parts) so at the very least, there is still good potential for a gain in share prices even if BB/BBRY remains in break-even territory. That does not mean that a couple of bad news items could not drive share price down to the $6 range again or that a couple of good news items could not drive it up to well above current prices. The recently released numbers just don't support a move either way.
    richardat likes this.
    03-29-13 11:09 AM
  23. BBInPlay's Avatar
    Yes, it will be interesting though. They need to maintain those services for the developing nations, since NA has largely already abandoned BIS, there wont' be any loss there. The nice thing for BB is that they can still get their BIS revenue in the countries where z10 isn't an option. The downside is, the erosion there appears to have begun in earnest. One of the beauties of BIS was that it cost relatively little, which is why it is a nice cash cow for BB even though hardware sales make them more revenue.
    Service revenue is only down 3% this quarter. That is not "earnest erosion ", that is a very slow considering the transition they are in.

    Posted via CB10
    dusdal likes this.
    03-29-13 11:13 AM
  24. BBInPlay's Avatar
    A full month for the UK and very nearly a full month in Canada. At least a full week of sales in all their key markets except for the US.

    Keep that in mind

    Sent from my GT-N7100 using Tapatalk 2
    They did not launch in all their key markets except in the US. It was only a small portion.

    Posted via CB10
    03-29-13 11:15 AM
  25. richardat's Avatar
    Service revenue is only down 3% this quarter. That is not "earnest erosion ", that is a very slow considering the transition they are in.

    Posted via CB10
    Service revenue increased steadily through mid 2011, hitting a huge peak at the end of 2011. It declined throughout 2012. RIM tried to attribute 2012 losses to the service interruption problems and the resulting credits granted - something I did not feel fully accounted for the situation. Now losses have continued. I stand by my words: the erosion "appears to have begun in earnest".

    PS. The fact that you seem to be trying to portray "3%" as "slow", does not discount my phrase "earnest erosion". First, as I just mentioned, I am not just looking at this quarter (I see that as increased evidence of the trend), second, this is something very important and serious to the company and thus the word "earnest".
    03-29-13 02:43 PM
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