[EchoTango]

Given the current BlackBerry strategy, I just don’t see how Chen can slow or halt the continuing decline in BlackBerry's hardware sales, which looked terrible to me. Remember that Chen’s sales target for 2015 is still 10 million devices sold, as confirmed in this Bloomberg story from only two days ago: BlackBerry?s Chen Says Sales Are Bottoming Out in Turnaround - Bloomberg Business

The problem with BlackBerry's "surprise profits" is that they seem to be linked to cutting important expenses like research and development and yet more operational cost cutting generally, all while sales are down a whopping 32% YOY. BB10 looks more hopeless long term than I’ve ever seen it because the sales numbers are so low that no developers will be attracted to what is currently the weakest development environment of the major OSes. Plus, BlackBerry is cutting R+D, which hurts its future ability to compete against rivals by improving its poor-selling product portfolio. Which customers, apart from the hyper-security microsegment, would invest in BB10 right now?

At this rate, I think BlackBerry's hardware sales may collapse before software grows anywhere close to the size to pick up the resulting slack in revenue. Who here believes Chen when he targets software revenue of $500 million by March of 2016 when this quarter was only $67 million?

I'm afraid I can't agree with your assessment, although I'm perfectly willing to accept I'm in total denial over Blackberry's situation.

In my view, the BB10/BES12 product set has yet to be fully realized and understood by the market. Further, I believe there will some retrenchment in BYOD policies, especially within the regulated sectors to move back to a company supplied and controlled device. Blackberry is well positioned to capitalize on this change with modestly priced fully featured secure devices fully configured for corporate needs. I also think there will still be a rather modest consumer appeal for those who want a communications/productivity centric devices that are not dependent on specific entertainment/social media applications.

Many significant hurdles still await, but the pieces are finally all in place and available for delivery, a place Blackberry has not been in for the past two years.

[cgk]

I'm afraid I can't agree with your assessment, although I'm perfectly willing to accept I'm in total denial over Blackberry's situation.

In my view, the BB10/BES12 product set has yet to be fully realized and understood by the market.

four year old OSes don't spring to life - it never happens.

[RubberChicken76]

four year old OSes don't spring to life - it never happens.

Not usually, though Windows did. :-)

Not many remember Windows 1, 2, 2.1 or 3.0 but 3.1 got big acceptance.

[early2bed]

I do think they need to get creative to try to increase hardware sales through the right marketing, sales incentives, better in-store presentation, and unique products. Also more partnerships and alliances must be formed. Maybe even adopt a 2nd or 3rd operating system. The current formula isn't working.

That's a lot of work and expense just to try to eek out a distant 4th place in the smartphone platform business with Apple, Google, and Microsoft going full steam ahead with wearables, electronic payments, cloud features, home automation, etc. that Blackberry really hasn't invested much in.

At some point, Wall Street will place a higher valuation on Blackberry as a purely a software company. That's when it will happen - when JC decides he doesn't want the hardware concerns holding back the valuation.

[EchoTango]

At some point, Wall Street will place a higher valuation on Blackberry as a purely a software company. That's when it will happen - when JC decides he doesn't want the hardware concerns holding back the valuation.

True, but Chen is very clear that hardware has to make money or he's not going sell it and I can't see Wall Street devaluing a company because it's making money. However, even though I do agree the basic argument, the overall Blackberry solution will be impacted if they no longer sell hardware. The new crop of moderately priced enterprise devices fits well with the strategy and should not be viewed in context of the consumer numbers.

We will never see the 10's of millions device volumes for Blackberry, but irrespective of how many are sold a profit will be realized for each and every one. Not many device manufacturers can claim that today.

[birdman_38]

We will never see the 10's of millions device volumes for Blackberry, but irrespective of how many are sold a profit will be realized for each and every one. Not many device manufacturers can claim that today.

By reducing inventory and using written down components. it may not last forever, especially if they aspire to release competitive devices.

[hoonigan99]

Like a few have mentioned, Chen recognizes that Hardware is necessary to be able to provide an end-to-end solution, therefore it is not going anywhere for the time being.

The likely path I see is that hardware will continue to be focused on two tiers: mid level affordable (for mass sales to enterprise to hand out), and premium priced higher spec devices for those who are willing to spend extra to get higher specs/better features etc.

I hope that it will continue in this path anyway, release the slider as a full spec device like the Passport at a high price point.

One thing that is important to remember about BlackBerry users is many of them will keep phones much longer than the average consumer who wants a new one each year. I don't have an issue buying an $800 BlackBerry because I will use it for 2+ years, but asking me to spend that on the newest galaxy phone is just not going to happen because next year's will be soooo much better (sarcasm) this is part of the reason BlackBerry suffers in the consumer market, they cannot maintain product refreshes annually, and majority of their customers aren't interested in that anyway. So the core users are satisfied (or would be) with a two year refresh cycle, but by that time the media has destroyed BlackBerry because it's current devices are ancient in comparison.

BB for Life

[ryanfromzion]

Posted via CB10

[EchoTango]

Got cold feet on your first post ?

No worries......