[Thunderbuck]

The stock is up because there appears to be a way forward. Announcing a five-year deal with one of the largest electronics manufacturers in the world goes a long way to convincing skeptics that you're staying in the device business.

The losses aren't a huge surprise to anyone, though I'm nearly heartbroken over BB10 sales thus far. My hope here is that a significant chunk of this writedown is on device inventories and we might see some discounting.

I just bought another 100 shares over the past couple of weeks. I'm happy for today, at least.

[RubberChicken76]

4. Selling poorly due to low demand or low availability? There is a difference.

No idea. and as much as I give people crap for doing this, I know in my own experience around Toronto, if I see a BlackBerry 10, it's usually a Z10. Once in a while a Q10. Never a Q5 or Z30.

[Thunderbuck]

No idea. and as much as I give people crap for doing this, I know in my own experience around Toronto, if I see a BlackBerry 10, it's usually a Z10. Once in a while a Q10. Never a Q5 or Z30.

There has been absolutely zero marketing for the Z30. And, sadly, if the Q5 is meant to be an "entry-level" BB10, it's priced awfully high.

[Dave Bourque]

He isn't wrong. From an accounting perspective, they did lose that much money. However, they didn't suddenly lose $4+ billion in cash, which is what is sometimes implied.

It's more than sometimes. It's all the time...

Z10STL100-3/10.2.0.1803

[sentimentGX4]

I think today was one of the impulsive novice "buy" days, like initially after the Prem Watsa 9 USD/share bid announcement. Investors are starved for positive news and willing to jump on any hope for a turnaround, regardless of how thin.

Come a couple days after when the true impact of the write down has been digested, the deal hype/euphoria has died down, and the more experienced fund managers/analysts publish their positions and establish their views and the stock price will come plummeting down.

Remember, a lot of investors wait for their financial institutions to establish their "ratings" (sell/hold/buy) and set their price targets before they act. In 2 months from now I see the stock trending significantly low than 6 USD/share.

[sleepngbear]

They like where chen is going for now. The previous results where worse than expected but they see that as the past.

Ya know, as much as I like to be the perennial optimist, I don't understand why they see poor performance in the past. If people aren't buying BB-built BB10 devices, what would compel them to buy them built by someone else? Sure, this partnership offloads some of the risk, and foxcomm can surely manufacture the hardware cheaper. But the bottom line is is that people still have to want to buy the things, and so far there's nothing that would appear to ignite that fuse... other than the hiring of a new CMO. I'm really surprised that the market is reacting so positively. But then that's why I'm not working on Wall Street, I guess.

[howarmat]

Ya know, as much as I like to be the perennial optimist, I don't understand why they see poor performance in the past. If people aren't buying BB-built BB10 devices, what would compel them to buy them built by someone else? Sure, this partnership offloads some of the risk, and foxcomm can surely manufacture the hardware cheaper. But the bottom line is is that people still have to want to buy the things, and so far there's nothing that would appear to ignite that fuse... other than the hiring of a new CMO. I'm really surprised that the market is reacting so positively. But then that's why I'm not working on Wall Street, I guess.

I agree people do have to buy the devices and that part is unseen but i think we can agree that lower priced hardware will sell better as long as quality doesnt get hit to much. windows phones sell on the low end, android sell on the low end and I think in the right markets BB10 will. They do need better app support in some form though

[ridemaster]

Earning reports are much worse than most expected.


Stock is going up because there are positives in the BBM growth and potential....and BlackBerry seems to be focusing more effort on the Enterprise sector.

Analysts are also happier than Chen seemingly isn't keen on competing at the high end of the market anymore. So if you're the typical Crackberry BB10 fan, this is bad news for you.

where do you come up with your info?

regarding the earnings report everybody was expecting much higher so called losses.

BBM is not the hail marry to the stock rising, lets look at all the other positives that came out of the ER.

Chen made it clear that Blackberry was going after the emerging markets, does not mean he is dropping the high end market at all. there is growth with blackberry in the emerging markets which will give Blackberry some financial support and makes sense to go after it. Blackberries high end will just be pushed to a whole new realm of which many will enjoy including myself..

[sleepngbear]

I agree people do have to buy the devices and that part is unseen but i think we can agree that lower priced hardware will sell better as long as quality doesnt get hit to much. windows phones sell on the low end, android sell on the low end and I think in the right markets BB10 will. They do need better app support in some form though

Definitely agree. Perhaps the analysts are seeing that all the pieces Chen is pulling together really do have some promise. His actions so far are a good 180 degree change from Heins' first public message that the company would just stay the course. Seeing how the last 18 months went, that has to be a good thing.

[addicted44]

Yea I woke up to the earnings call and started checking online news and pretty much every news outlet has headlines stating a $4.4B loss. I made a thread about it. Someone explained that it is like your house losing property value. I guess it kind of makes sense. But you would never say that you are losing $4.4B when they are just inventory write downs. It was necessary. They need a rebirth in Enterprise and cleaning up the previous mess was necessary.

Why is the media saying Blackberry had a $4.4Bn loss? Maybe because that is what Blackberry's own Press release says.

Company takes primarily non-cash, pre-tax charges of $4.6billion associated with long-lived assets, inventory and supply commitments, and previously announced restructuring and strategic review process; GAAP loss from continuing operations of $4.4 billion, or $8.37 per share diluted, compared with a GAAP loss from continuing operations of $965 million, or $1.84 per share diluted, in the prior quarter

Blackberry Press Release

Some of you folks are beyond ridiculous.

Does this mean that BB actually lost $4.4Bn? Probably not. Because GAAP tends to be a very conservative standard, which will often overstate losses, and understate gains. However, any media outlet which would not report this number would probably not be worth the virtual paper it was being read from.

[techvisor]

where do you come up with your info?

regarding the earnings report everybody was expecting much higher so called losses.

Actually almost all financial analysts were expecting much lower losses. Read any of the news stories today. For example:

http://mobile.reuters.com/article/id...31220?irpc=932
"Excluding the inventory writedowns and impairment charges, the loss was $354 million, or 67 cents a share. Analysts on average had expected a loss of 44 cents a share, according to Thomson Reuters I/B/E/S."

[Omnitech]

I may get back into this stock, because I'm finally starting to hear the beginning of a coherent and realistic strategy. They also have much more impressive people running the show now.

I think the stock rebounded because of these simple reasons.

I think those things were factors, but tbh when I saw the stock rising today it was really confounding to me at first.

Then when I think back on it, I think the real factor, as Thunderbuck pointed-out, was the 5-year Foxconn deal.

We have been listening to people here and all the other bobbleheads and waggly fingers in the press incessantly proclaiming doom and gloom and the end of the Blackberry hardware business for months now.

Then today comes along and they announce a 5-year contract with the largest manufacturer of electronic equipment in the world.

If that does completely blow out of the water all these naysayers that thought the company was prepared to toss their device business and hunker-down into a small software seller or just sell off the scraps, I don't know what does.

THAT's what I think really made the big impact.

It's telling that the first product of the Foxconn partnership is a low cost device.

Which I think was the PERFECT move for this company.

Not only is all the action in the smartphone business happening and going to happen in those markets, but many of those markets today are some of the absolutely most loyal BlackBerry markets that they have globally.

If they cede all of that to their competitors, they're finished. I have never seen a successful business model in the consumer electronics industry for a company that can stay on the cutting edge of technology while selling a few thousand gold-encrusted devices to Sheiks in the Middle East. (Unless you are some boutique division of a massive company that just throws money into a pit for the glory of making a "halo" product that was never intended to actually make money anyway.)

Samsung may throw gold bars at customers, retailers and distributors to get them to move their product, but Blackberry is in the "unfortunate" position of actually needing to build a business-model that supports itself and, perish the thought, actually maybe might make some real money some day.

[m1a1mg]

I agree people do have to buy the devices and that part is unseen but i think we can agree that lower priced hardware will sell better as long as quality doesnt get hit to much. windows phones sell on the low end, android sell on the low end and I think in the right markets BB10 will. They do need better app support in some form though

I wish there was some way to find out how many OS7 devices they have, since they seem to be selling so well. Further, from reading the actual release, it seems that BBRY paid their way out of some commitments, but didn't specify which.

As one who preached for a software future, I like the Foxconn partnership. It takes much of the heavy lifting and exposure off BB. But I'm really surprised it's going to be a BB10 device at first.

[eddy_berry]

Why is the media saying Blackberry had a $4.4Bn loss? Maybe because that is what Blackberry's own Press release says.



Blackberry Press Release

Some of you folks are beyond ridiculous.

Does this mean that BB actually lost $4.4Bn? Probably not. Because GAAP tends to be a very conservative standard, which will often overstate losses, and understate gains. However, any media outlet which would not report this number would probably not be worth the virtual paper it was being read from.

I don't expect everyone to understand my ramblings. Read AmazinglyGraceless' post. It is what I meant. BlackBerry may have posted as such but they also explained it somewhat. The media didn't bother. They didn't properly inform their readers. It just snowballs out of control and it annoys the heck out of me. As soon as one news outlet posted about the $4.4B loss they all jumped on it. None looked at the numbers and analyzed them it seems. They were just trying to be "first to print" maybe.

Posted via CB10

[texazzpete]

Then when I think back on it, I think the real factor, as Thunderbuck pointed-out, was the 5-year Foxconn deal.

We have been listening to people here and all the other bobbleheads and waggly fingers in the press incessantly proclaiming doom and gloom and the end of the Blackberry hardware business for months now.

Then today comes along and they announce a 5-year contract with the largest manufacturer of electronic equipment in the world.


THAT's what I think really made the big impact..

Or more likely that the near term focus seems to be selling low cost devices?
A foxconn deal alone is not enough to make the stock go up. The general analyst consensus is that Blackberry 10 devices cannot compete at the high end anymore. A renewed focus at the low end, low cost market and the fact that Foxconn will manage inventory (this part is probably the most critical bit of information - this will help minimize future writedowns)

If that does completely blow out of the water all these naysayers that thought the company was prepared to toss their device business and hunker-down into a small software seller or just sell off the scraps, I don't know what does.
.

I think most of them thought Blackberry would focus on enterprise, MDM solutions and messaging. Those aren't shabby if they can be fully monetised, certainly a far cry from the 'small software seller' you're painting it as.

I think I read somewhere that the chat app LINE made $1bn revenue this last quarter.

Which I think was the PERFECT move for this company.

Not only is all the action in the smartphone business happening and going to happen in those markets, but many of those markets today are some of the absolutely most loyal BlackBerry markets that they have globally.

If they cede all of that to their competitors, they're finished.

Those WERE loyal Blackberry markets in the past. That's all fading now. BBM moving cross platform and BB10 not supporting BIS but relying on data plans that are in the same region as those for Android devices has made the cheap and powerful Android devices very appealing to the masses.

In Nigeria, Blackberry used to be wildly popular in the 18 - 24 demographic for BIS and BBM. Now cheap Quad Core Chinese Android phones from Tecno, Gionee and a few others are sweeping the market. Lenovo sees this and plans a launch here for Q1 2014. Why do you think BBM remains the most downloaded app in the iOS and Android app stores in most emerging markets? People are switching.
This same situation is mirrored in nearly every other emerging market where Blackberry used to be wildly popular. Indonesia, South Africa, Thailand, you name it.

I spoke to a friend of mine who runs a retail store in Lagos, Nigeria. According to him, aside from the diehard keyboard lovers that buy the Q5 and the Q10 in trickles, sales of BlackBerry devices are in a very steep decline.

Whatever the fruit of BlackBerry and Foxconn's partnership is, it had better come sooner rather than later.

[bekkay]

It's more than sometimes. It's all the time...

Z10STL100-3/10.2.0.1803

Lol. You do understand that the loss you are referring to does not always reflect cash flows, right? It includes non-cash expenses such as depreciation ("loss" of book value of fixed assets, just like the loss of value in inventory and other assets like in this case).

So, no, operating losses you are referring to do not always imply cash losses.

[sixpacker]

Why would it not go up? Are you kidding me. There is more positive than negatives in this quarterly report.

Z10STL100-3/10.2.0.1803

A 400 million loss, BB10 tanking and still heavily reliant on BB7 for income, this is positive?

Only a politician would spin "not as horrible as expected" to be "more positives than negatives"...

[Omnitech]

A foxconn deal alone is not enough to make the stock go up.

I'm not the only person who takes that view. Looking back, it appears that a number of financial analysts wrote articles yesterday about the stock that made precisely that same assertion.

The general analyst consensus is that Blackberry 10 devices cannot compete at the high end anymore.

The general analyst consensus since the year 2012 and several years prior was that Blackberry isn't competitive. I take such opinions with a very large grain of salt.

A renewed focus at the low end, low cost market and the fact that Foxconn will manage inventory (this part is probably the most critical bit of information - this will help minimize future writedowns)

Yes, and this is the area that Blackberry has seen its userbase erode most catastrophically over the last year.

Coming into 2013, BlackBerry had lost the hearts and minds of most potential customers in "wealthy" countries. They were hoping to re-kindle that with BB10, and while it at first seemed promising, for a variety of reasons, it didn't pan out very well for them. (It certainly didn't help that the US carriers refused to carry the Z10 for 2 months after it was introduced elsewhere.)

Whereas at the beginning of 2013, RIM was still touting 80 Million userbase/BBM users, all of which were BBOS users, and especially when it came to BBM users, most of which were in their key developing markets of ie Indonesia, Malaysia, South Africa, Nigeria, Saudi Arabia, UAE, Kuwait, Dubai, Mexico, Caribbean and India.

As 2013 wore on, RIM stopped reporting BBM user numbers and low-end Android devices continued blanketing the developing world, severely undermining a key RIM consitituency.

It's my observation that RIM/Blackberry then basically let those highly price-sensitive markets flounder and deflate, while haplessly trying to get them to buy expensive BB10 devices.

RIM was never very good at selling low-cost/low-margin devices to compete with the likes of Nokia, but they had two key advantages in those markets when it came to smartphones: BBM and BIS.

But in the year 2013 as their attention shifted to trying to get BB10 off the ground, they let those markets flounder as their customers there were increasingly being poached by both low-end Android devices, and alternative Instant Messaging platforms like Kik and WhatsApp, which ate into their BBM customer base. To add insult to injurity, carriers started pushing aggressively-priced "social media plans" in such places which directly undermined RIM's traditional BIS advantage. The BIS advantage also declined as RIM's market strength declined, making it harder and harder to push their proprietary network system as their marketshare made it less and less appealing to carriers to provide special technical accomodations to RIM.

Those WERE loyal Blackberry markets in the past. That's all fading now. BBM moving cross platform and BB10 not supporting BIS but relying on data plans that are in the same region as those for Android devices has made the cheap and powerful Android devices very appealing to the masses.

In Nigeria, Blackberry used to be wildly popular in the 18 - 24 demographic for BIS and BBM. Now cheap Quad Core Chinese Android phones from Tecno, Gionee and a few others are sweeping the market. Lenovo sees this and plans a launch here for Q1 2014. Why do you think BBM remains the most downloaded app in the iOS and Android app stores in most emerging markets? People are switching.

This same situation is mirrored in nearly every other emerging market where Blackberry used to be wildly popular. Indonesia, South Africa, Thailand, you name it.

I spoke to a friend of mine who runs a retail store in Lagos, Nigeria. According to him, aside from the diehard keyboard lovers that buy the Q5 and the Q10 in trickles, sales of BlackBerry devices are in a very steep decline.

Whatever the fruit of BlackBerry and Foxconn's partnership is, it had better come sooner rather than later.

I don't disagree with any of that as I wrote above. Which is why your apparent critique of the fact that the Foxconn partnership would first produce a low-end device targeted to BlackBerry's single most important market in the world right now didn't make any sense to me.

BlackBerry really needs something like that to get back in the game before those markets are lost for good.


http://forums.crackberry.com/general...-users-886030/

.

[texazzpete]

I don't disagree with any of that as I wrote above. Which is why your apparent critique of the fact that the Foxconn partnership would first produce a low-end device targeted to BlackBerry's single most important market in the world right now didn't make any sense to me.

BlackBerry really needs something like that to get back in the game before those markets are lost for good.


http://forums.crackberry.com/general...-users-886030/

.

I agree with everything you wrote earlier. Quite a robust analysis.

Don't get me wrong. The Foxconn deal is the best thing blackberry could have done. I'm just worried that this will be too late. By the April 2014 time line for release of the planned low cost phones, the market erosion will already be significant. The next wave of low cost Android phones are going to be killer.




Sent from my GT-I9500 using Tapatalk

[jojo beaconsfield]

People don't understand, the stock is rising cause it represents what is expected for the company. No one buys a business for the past results, people buy it for what it will pay in the future.

Posted via CB10

And that's the way it is,in a nutshell.

[Omnitech]

I agree with everything you wrote earlier. Quite a robust analysis.

Don't get me wrong. The Foxconn deal is the best thing blackberry could have done. I'm just worried that this will be too late. By the April 2014 time line for release of the planned low cost phones, the market erosion will already be significant. The next wave of low cost Android phones are going to be killer.

Thanks.

BTW - I don't know why I always assumed you were in Texas b/c of your handle, but I just noticed you list your carrier as MTN. Are you in Africa?

[jojo beaconsfield]

And that's the way it is,in a nutshell.

If you would like to know why ,and are still confused check this video out,do a search on the web,easy,...Bloomberg,will foxconn save blackberry,video... even Bloomberg seems to be coming around,asking the right questions,go figure.

[texazzpete]

Thanks.

BTW - I don't know why I always assumed you were in Texas b/c of your handle, but I just noticed you list your carrier as MTN. Are you in Africa?

Yep. Nigeria.
'texazzpete' comes from the comedic villain in the 'SuperTed' cartoons I loved as a kid. Don't judge me

I tend to talk a lot about sales in emerging markets because I'm pretty well connected with loads of the tech retailers in Lagos, Nigeria. Plus I know what's happening in Nigerian Twitter.
BBM (and to a lesser extent, BIS) was THE main reason blackberry sales skyrocketed to Eclipse Nokia. Cross platform BBM, the increasing popularity of whatsapp, no BIS on BB10 and an incredible invasion of cheap Android phones has pretty much slaughtered the BlackBerry marketshare here. It doesn't help that all the trendy kids use instagram these days (still unavailable on BB10) and the incredibly bad impression the 9900 had on people (Abysmal battery life, spinning clocks, red light of death).

A cheap BB10 device will help, but hopefully blackberry learns from the Q5 pricing disaster.



Sent from my GT-I9500 using Tapatalk

[Dave Bourque]

A 400 million loss, BB10 tanking and still heavily reliant on BB7 for income, this is positive?

Only a politician would spin "not as horrible as expected" to be "more positives than negatives"...

The stock would not go up if what you just said was true...

Z10STL100-3/10.2.0.1803

[Omnitech]

Yep. Nigeria.
'texazzpete' comes from the comedic villain in the 'SuperTed' cartoons I loved as a kid. Don't judge me

Oh, I'm not judging, it's just kinda hilarious how far off I was about where you were in the world.

I tend to talk a lot about sales in emerging markets because I'm pretty well connected with loads of the tech retailers in Lagos, Nigeria. Plus I know what's happening in Nigerian Twitter.

Good to know because I'm curious about that market and I don't see too many people from there posting here. Way more from SA and Middle Eastern countries.

I did do a post on emerging markets at one point, but the situation has probably changed somewhat since then:

http://forums.crackberry.com/news-ru...ape-up-782424/