If BB10 was a paid OS would we pay for it?! Thoughts inspired by a new Crackberry article.

Originally Posted by KAM1138

Oh really--so Blackberry set pricing without ANY thought towards covering (SORRY--CHANGE HERE) SOFTWARE (not-hardware costs). They said "Well, we're gonna sell the first 2 Million units to cover hardware costs, but then we'll start to pay for OS development from the next 5 Million, despite the fact that each UNIT has an associated hardware cost.

BlackBerry hoped that they would sell many 10s of millions of units.

Chen later said that continued OS development would only be able to continue with sales of 10 million units per year. At $50/unit contribution rate, that would equate to the 1/2 billion dollars (per year) I've alluded to before for continued development.

Since BlackBerry never realized any economies of scale due to poor sales, they weren't even in a position to get that $50 contribution rate per device - so nothing went to OS development.

Obviously the customer bought and paid for the whole product, but we're discussing it from BlackBerry's point of view. They essentially gave away the OS for free in every practical sense.

Originally Posted by KAM1138

If you think that Someone paid for a BB10 phone, and they only paid for hardware, then you're fooling yourself.

The fact that Blackberry lost money on the overall venture doesn't change this. Blackberry lost money on software, hardware, marketing--the whole venture.

To claim that they lost money ONLY on one piece of that is fantasy, based on nothing but an arbitrary line chosen by someone attempting to support their opinion about BB10.

That is not the point we are trying to make. Obviously yes there is software costs in the cost of buying a phone but no one considers the OS costing anything because all phones have to have an OS and its not really like the OS adds extra cost to the phone in the past.

The point is bb10 cost were just part of the phone cost before but in the future scenario you would have to pay some added cost JUST for the OS on top of hardware. Like my example above, you could use the phone with android and the cost would be XXX but if someone wanted a company to make that same hardware design phone it would now be $400 more expensive just to cover the addition millions resurrect a dead OS.

Originally Posted by glwerry

"Exorbitant" is the word you want. "Absorbent" means it soaks up liquid well.

The leasing of Office is an interesting one - I lease it because by leasing I also get 1 Terabyte of cloud storage.
At the time that I signed on it was the best storage deal around. So, yes, I could have purchased Office for a one time fee, but then I'm having to rent / lease my cloud storage anyways. So, this way I have killed both birds with the one stone.

Firstly, thank you for the correction. But purchasing Microsoft outright was a business model that was useful to the individual consumer for personal use. If someone needed additional functionality,an additional add-on or bundle could be purchased. The way it is now it would seem more to box the consumer in. I have a copy of Microsoft Office for Windows 98 which I used until I decided to upgrade it. Which I did constantly when the newer versions incorporated features that were to my benefit. And that option was available to many of us . Leaving the purchasing decision more in the hands of the consumer. But now, it would seem this marketing system benefits Microsoft's cash flow.


Still, A BlackBerry Fan!!!

Originally Posted by conite

BlackBerry hoped that they would sell many 10s of millions of units.

Chen later said that continued OS development would only be able to continue with sales of 10 million units per year. At $50/unit contribution rate, that would equate to the 1/2 billion dollars (per year) I've alluded to before for continued development.

Since BlackBerry never realized any economies of scale due to poor sales, they weren't even in a position to get that $50 contribution rate per device - so nothing went to OS development.

I paid Blackberry for a product, which included hardware and software.
So, I forget what I paid for my Z10...$600 I think (may have been $500). Let's say $600 for this example.
So, what was Blackberry's cost for that hardware? Was it $600? I'm guessing not.

So, even if all my money went directly from sales at my local store to the Hardware Manufacturer--and that sort of discrete buckets of money exist, there would still be some number of dollars NOT going to that hardware manufacturer--for hardware costs.

I'm guessing that the Hardware cost of most phones is actually less than the price paid by the consumer.

Originally Posted by howarmat

That is not the point we are trying to make. Obviously yes there is software costs in the cost of buying a phone but no one considers the OS costing anything because all phones have to have an OS and its not really like the OS adds extra cost to the phone in the past.

The point is bb10 cost were just part of the phone cost before but in the future scenario you would have to pay some added cost JUST for the OS on top of hardware. Like my example above, you could use the phone with android and the cost would be XXX but if someone wanted a company to make that same hardware design phone it would now be $400 more expensive just to cover the addition millions resurrect a dead OS.

Well, whatever the point is--the statement is that BB10 was "free." That's the statement I questioned, and objected to being true.

I've not disputed, and in fact, specifically acknowledged that there would be additional costs of development of the OS, and I'm not disputing that would add to the cost.

Originally Posted by KAM1138

I paid Blackberry for a product, which included hardware and software.
So, I forget what I paid for my Z10...$600 I think (may have been $500). Let's say $600 for this example.
So, what was Blackberry's cost for that hardware? Was it $600? I'm guessing not.

So, even if all my money went directly from sales at my local store to the Hardware Manufacturer--and that sort of discrete buckets of money exist, there would still be some number of dollars NOT going to that hardware manufacturer--for hardware costs.

I'm guessing that the Hardware cost of most phones is actually less than the price paid by the consumer.

No one is disputing the fact that you paid BlackBerry for a product that includes hardware and software.

We are discussing whether BlackBerry actually CHARGED you for the software - which we know they did NOT.

The $600 (or whatever), just covered manufacturing, distribution, and sales.

If you were to buy a BB10 device today, under the "pay for the OS" scenario discussed in this thread, you would have to first pay that SAME $600 for the hardware, and THEN the $10,000/yr (or whatever) for the OS.

So if less than a million people are using BB10 with the current $600 + $0 scenario, how many would be interested with the $600 + $xxxx scenario?

The implication of all of this "BB10 is Free" was that no one is willing to pay for it.
Actually, quite a few people (although not nearly enough to make it a commercial success) DID pay for the product, which included BB10.

This is similar to the statements of people saying "BB10 was up for lease and no one wanted to pay for it."--and this is true (to the best of our knowledge). But companies don't specifically pay for Android either (so I'm told).

Originally Posted by conite

No one is disputing the fact that you paid BlackBerry for a product that includes hardware and software.

We are discussing whether BlackBerry actually CHARGED you for the software - which we know they did NOT.

Consumers paid Money, got hardware and software. We paid for that--we chose to pay for that, we knew what we were getting.

The fact that sales didn't generate enough revenue to cover the costs of the development doesn't change that.

Originally Posted by KAM1138

Consumers paid Money, got hardware and software. We paid for that--we chose to pay for that, we knew what we were getting.

The fact that sales didn't generate enough revenue to cover the costs of the development doesn't change that.

You're utterly missing the point.

I'm off to pound back a few shots.

Originally Posted by i_plod_an_dr_void

Yes I would pay for a privacy oriented bb10 with a clearly delined privacy space and lock-down on my personal files. Android does not do what I want it to, nor do I like the way it does it.
I do not like the data slurping.
I do not like the potential for microphone turn-ons by apps at any time day or night - we used to call that a nosey neighbour.....and yes it is possible for apps to do this...maybe even google has experimented in this regard or other 3rd party apps. I won't allow Google home in my house, nor Amazon Alexa....and I expect my smartphone not to breach my privacy either.
I do not like the potential for camera or video recording either.
I don't want a snoop in my house or in my pocket. My business is none of their business, if I don't want it to be. I, like most people do not wish for the Kardasians to be my role models for life.

What if the Kardashians champion BBOS? Then can they be our role models? Kim used to do that.

Posted via CB10

Originally Posted by conite

You're utterly missing the point.

I'm off to pound back a few shots.

First--I really am sorry if this has been upsetting, such that I'm driving you to drink. I think you're a helpful member of the community. It doesn't mean I think you're right, and I think you're biased on this, and you simply made a point that's not true.

I'll summarize how this discussion went down to make it really clear.
Post #52 you said:
"The rub is that you have to have tens of millions of users to spread proprietary OS development costs over enough people to make it financially feasible.

Currently, there are less than a million BB10 users when it's free."

I believe what you're attempting to argue is that no one would pay for BB10, because less than a million people use BB10 (currently), even when it's free.
But that's not true--because BB10 was NEVER a separate item. Customers DID pay for a product which inherently included BB10.
So, your premise (BB10 was "free") is false.

For whatever reason, you refuse to simply admit that's an overreach. Then you attempt to claim that money is somehow following discrete paths and that money can go various places, but NEVER to OS development costs. I don't think you can make that claim, and I highly doubt you have any evidence to back that up.

You're using the claim that few (less than 1 million) people will use BB10 even when it's free. That's NEVER been the case.

It is simply not true. A few million users DID pay for BB10, and wanted to use BB10. The fact that Blackberry's business plans failed and their sales did not produce profits doesn't negate the fact that people Paid for BB10.

More specifically people CHOSE to pay for BB10, and whether or not anyone would pay MORE is the question at hand in this entire thread.

I just have no idea why you refuse to admit that you made an inaccurate point (that BB10 is free).

Enjoy your shots.

Originally Posted by KAM1138

You're using the claim that few (less than 1 million) people will use BB10 even when it's free. That's NEVER been the case.

Up to this point you could buy a BB10 device strictly for the price it cost to manufacture and distribute the device.

In this scenario, you would have to pay that SAME price PLUS the amount required to cover OS development (which they never collected from you before).

$600+$0 versus $600+$xxxxx.

Use whatever nomenclature you wish, but it's an added price precisely matching the cost of OS development.

Originally Posted by KAM1138

First--I really am sorry if this has been upsetting, such that I'm driving you to drink. I think you're a helpful member of the community. It doesn't mean I think you're right, and I think you're biased on this, and you simply made a point that's not true.

I'll summarize how this discussion went down to make it really clear.
Post #52 you said:
"The rub is that you have to have tens of millions of users to spread proprietary OS development costs over enough people to make it financially feasible.

Currently, there are less than a million BB10 users when it's free."

I believe what you're attempting to argue is that no one would pay for BB10, because less than a million people use BB10 (currently), even when it's free.
But that's not true--because BB10 was NEVER a separate item. Customers DID pay for a product which inherently included BB10.
So, your premise (BB10 was "free") is false.

For whatever reason, you refuse to simply admit that's an overreach. Then you attempt to claim that money is somehow following discrete paths and that money can go various places, but NEVER to OS development costs. I don't think you can make that claim, and I highly doubt you have any evidence to back that up.

You're using the claim that few (less than 1 million) people will use BB10 even when it's free. That's NEVER been the case.

It is simply not true. A few million users DID pay for BB10, and wanted to use BB10. The fact that Blackberry's business plans failed and their sales did not produce profits doesn't negate the fact that people Paid for BB10.

More specifically people CHOSE to pay for BB10, and whether or not anyone would pay MORE is the question at hand in this entire thread.

I just have no idea why you refuse to admit that you made an inaccurate point (that BB10 is free).

Enjoy your shots.

When Conite says "less than 1 million use BB10 even when it's free" that's just a way of saying that BlackBerry was selling devices at a price much less than what was needed for them to cover all their costs (hardware + OS+ marketing + distribution + etc + etc).

And, sales would be only a small fraction of 1 million if people had to pay $6000 for a device instead of $600.

Back to Kindergarten, folks!

Originally Posted by conite

Up to this point you could buy a BB10 device strictly for the price it cost to manufacture and distribute the device.

In this scenario, you would have to pay that SAME price PLUS the amount required to cover OS development (which they never collected from you before).

$600+$0 versus $600+$xxxxx.

Ok, so, where did the money come to pay OS10 Developer staff? Did any of that occur AFTER BB10 Sales started? Was that sales income kept separate or did it go into a general pool of funds (at Blackberry).

If Blackberry actually DID somehow keep all of those funds separate, and specifically avoided using any of that money to pay for OS development (salaries, lights in offices--whatever), then I'll be happy to say "Oh I was wrong."

Otherwise, you're just creating imaginary constructs about how money is and isn't used.

I PROMISE you--if there are actual accounting practices within Blackberry that makes what you say true, then I will happily admit that your point was valid.

Scotch on the rocks please:rotfl:

Originally Posted by KAM1138

I paid Blackberry for a product, which included hardware and software.
So, I forget what I paid for my Z10...$600 I think (may have been $500). Let's say $600 for this example.
So, what was Blackberry's cost for that hardware? Was it $600? I'm guessing not.

So, even if all my money went directly from sales at my local store to the Hardware Manufacturer--and that sort of discrete buckets of money exist, there would still be some number of dollars NOT going to that hardware manufacturer--for hardware costs.

I'm guessing that the Hardware cost of most phones is actually less than the price paid by the consumer.

You might have paid $600 for a Z10 but a lot of people didn't. The fire sale started quickly after the failed launch.

Conite's point, as I read it anyway, is that the materials have a fixed, tangible cost. Blackberry had to pay its material suppliers for parts even if they didn't sell ONE single phone. That's an expense that has to be paid or the physical product literally doesn't exist.

Software development costs are recouped after the product starts to sell.

So yes, part of your $600 went towards software development that had taken place before. Part of it went towards Blackberry's expected profit at that price point, and the rest covered materials and logistics. But once the fire sale started, they were just trying to get back enough to cover materials cost. Suppliers have to get paid or they take their pound of flesh.

Software development costs were never recovered. Devs don't get a pound of flesh if sales are bad. Those thousands of programmers who were let go? Yeah that's where they reduced software production cost post-release.

This isn't just a BB10 thing. The Priv was (laughably) a $700 phone at release. By the time I got mine last year they were being blown out for $300 brand new. That was pretty much the materials/logistics cost of the phone. Zero hardware profit, and the company just had to eat (write off) any software time put into creating it.

Originally Posted by KAM1138

Ok, so, where did the money come to pay OS10 Developer staff?

They LOST billions of dollars. The money came from cash reserves, sale of assets, and injected money from Fairfax.

Originally Posted by conite

They LOST billions of dollars.

I'm sure they did. In your opinion was BB10 the CAUSE of this loss?

Originally Posted by kvndoom

You might have paid $600 for a Z10 but a lot of people didn't. The fire sale started quickly after the failed launch.

Conite's point, as I read it anyway, is that the materials have a fixed, tangible cost. Blackberry had to pay its material suppliers for parts even if they didn't sell ONE single phone. That's an expense that has to be paid or the physical product literally doesn't exist.

Software development costs are recouped after the product starts to sell.

So yes, part of your $600 went towards software development that had taken place before. Part of it went towards Blackberry's expected profit at that price point, and the rest covered materials and logistics. But once the fire sale started, they were just trying to get back enough to cover materials cost. Suppliers have to get paid or they take their pound of flesh.

Software development costs were never recovered. Devs don't get a pound of flesh if sales are bad. Those thousands of programmers who were let go? Yeah that's where they reduced software production cost post-release.

This isn't just a BB10 thing. The Priv was (laughably) a $700 phone at release. By the time I got mine last year they were being blown out for $300 brand new. That was pretty much the materials/logistics cost of the phone. Zero hardware profit, and the company just had to eat (write off) any software time put into creating it.

Yes, I understand. Blackberry lost money surrounding it's hardware business with and without BB10. That's why they're not in that business anymore.

I just don't think it's accurate to say that one particular element of Blackberry's products can be separated and stated as the source of loss, as if it stands on its own, or that Customers somehow DIDN'T pay for that particular part, while paying for other things that are inherently tied together.

Blackberry is a big failure--I get it. BB10 was not a successful product. No argument.

It doesn't mean it was "free."

Originally Posted by KAM1138

I'm sure they did. In your opinion was BB10 the CAUSE of this loss?

It was the cause and that's not opinion. The write-offs had been attributed to BB10 and everything that could be GAAP attached to it before and then after Chen got there. Part of the problem with BB10 is that it destroyed actual BBOS revenue and profits with losses.

Had BB never developed any part of BB10 hardware or software for the hardware, there would have been several billion dollars of cash to spend on something else. BB10 is recognized as significant mistake and example of corporate failure and waste of shareholder assets in last 10 years.

Originally Posted by KAM1138

I'm sure they did. In your opinion was BB10 the CAUSE of this loss?

100%. Positively.

Originally Posted by Chuck Finley69

It was the cause and that's not opinion. The write-offs had been attributed to BB10 and everything that could be GAAP attached to it before and then after Chen got there. Part of the problem with BB10 is that it destroyed actual BBOS revenue and profits with losses.

That's like saying that the Bishop is the cause of a Player losing a chess game. A bishop doesn't DO anything--it's USED by a person making decisions.

A business decision is what caused that.

I mean...this is literally blaming an inanimate, unthinking thing for human decisions, which led to financial woes.

Originally Posted by conite

100%. Positively.

So, BB10--a piece of software CAUSED RIM/Blackberry to lose Billions of Dollars.

Not the Mikes, not Heins, or any PERSON who was in control of decisions, and choices...an inanimate thing is the CAUSE.

That's irrational.
T

Originally Posted by KAM1138

That's like saying that the Bishop is the cause of a Player losing a chess game. A bishop doesn't DO anything--it's USED by a person making decisions.

A business decision is what caused that.

I mean...this is literally blaming an inanimate, unthinking thing for human decisions, which led to financial woes.

Humans chose to support Android/IOS over BB10. It should have never been developed as late in the game as it was for at least a dozen reasons. Even if BB owned Android in 2005 it wouldn't have mattered. They never had the money to pour into the ecosystem and wage the battle with Apple or Microsoft let alone both at same time. BB only significant revenue and profit stream depended on BBOS staying in place as long as possible. For the former founders and former executives of BB, the creation and development of BB10 was a success and did exactly what it was supposed to do, buy time so insider company shares could be unloaded legally...

Originally Posted by KAM1138

That's like saying that the Bishop is the cause of a Player losing a chess game. A bishop doesn't DO anything--it's USED by a person making decisions.

A business decision is what caused that.

I mean...this is literally blaming an inanimate, unthinking thing for human decisions, which led to financial woes.

Humans chose to support Android/IOS over BB10. It should have never been developed as late in the game as it was for at least a dozen reasons. Even if BB owned Android in 2005 it wouldn't have mattered. They never had the money to pour into the ecosystem and wage the battle with Apple or Microsoft let alone both at same time. BB only significant revenue and profit stream depended on BBOS staying in place as long as possible. For the former founders and former executives of BB, the creation and development of BB10 was a success and did exactly what it was supposed to do, buy time so insider company shares could be unloaded legally...