02-17-18 06:44 PM
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  1. markmall's Avatar
    BlackBerry (BBRY) Purchase Obligations Will Limit Takeout Premium, Says Pacific Crest

    (I actually think Faucette overestimated this, but it was still very likely in the billions and then down to hundreds of millions by the end of that FY)

    By end of FY2014, BBRY started explicitly separating them out in their reporting. You can see that Chen reduced that liability dramatically from FY14 - FY17.



    Do you know what a purchase commitment is?
    I have tried to learn more about what the commitments consisted of after reading this. I don't think we know exactly what the commitments were. Still, this is evidence that helps your theory that Chen was spinning his wheels with BB10 and knew that it would never work but felt he had to release a certain number of the phones anyway. The existence of the Passport and whether he had commitments for that phone calls this theory into question, in my opinion.

    Even with these purchase commitments, I still don't agree with this theory based on my having watched a lot of interviews with Chen over time. This is really subjective as to what he was thinking. Maybe he believed this eventually, but not at the beginning of his tenure in my opinion. (There is a question of his integrity if he kept giving assurances about BB10 and insinuating that they might release new phones.)

    None of this changes my underlying opinion that BB10 had a chance if marketed properly and making a better attempt at its success was the best business choice for Blackberry. I think this was true even after the BoD freaked out and tried to sell the company in a public fire sale. In fact, I think that it might even be true today if you had the right talent in management. Chen obviously would not be someone that could execute this. He clearly does not understand anything approaching "consumer" ("prosumer," whatever) electronics. I'm not sure he understands how to market and sell software for that matter.
    02-03-17 11:37 PM
  2. early2bed's Avatar
    John Chen started talking with Google about Android immediately after he was hired. The next two years of BB10 support was about hanging on to existing customers until they could make the transition. He actually never green-lighted a flagship BB10 phone - the Passport was already too far along to cancel when he got there.

    On a warm winter's day in January 2014, Ron Louks journeyed there to gamble. But he wasn't trying his luck at the tables. He was there, on one of his first days on the job as head of BlackBerry's smartphone business, to bet on the company's future.

    After landing in the desert city at the start of the annual Consumer Electronics Show, Louks checked in with BlackBerry CEO John Chen and then set off for his first and most important appointment. Tellingly, it wasn't with a wireless carrier or one of BlackBerry's manufacturing partners. It was with Google.

    "Android, in our mind, was a longtime coming," Louks said in an interview last week.

    Chen, a software industry veteran hired to help save the Canadian company in late 2013, had already been talking to Google about how BlackBerry could better work with Android, the world's most popular operating system.
    https://www.cnet.com/news/inside-bla...-with-android/
    southlander likes this.
    02-04-17 02:45 AM
  3. elfabio80's Avatar
    VW and BB are not very comparable. VW is enormous, partially state owned, the largest car maker in the world, and owner of the most profitable car brand in the world.

    Their most profitable brand was only lightly affected by the scandal (diesel Panameras and Cayennes only). VW's largest single market (China) was also almost completely unaffected.

    BB is tiny in comparison, and has a small fraction of the cash on hand to weather a storm.
    It is not true that only Panameras and Cayenne were affected....Sorry for the OT.
    02-04-17 03:06 AM
  4. eshropshire's Avatar
    This is easy, BB10 was at least 3 to 4 years too late. BlackBerry sat on their tail for almost 4 years doing nothing except make fun of iOS and Android. Then when they finally responded it was way too late. Then they released a new OS which quite a few people had lots of problems.

    Lots of marketing cannot over come the other issues, just look at Microsoft. They have spent multi millions of dollars marking Windows mobile with no success.
    02-04-17 04:34 AM
  5. eshropshire's Avatar
    At a minimum, the 80 million BBOS users knew about it. They all went to Android and iOS anyway.

    How would YOU have marketed a product with essentially no ecosystem, so-so specs, and an OS with a large learning curve?
    Agree, who did not know about BlackBerry. They were one of the largest cell phone companies until 2013.
    02-04-17 06:06 AM
  6. eshropshire's Avatar
    Again, you post "facts" that are really your speculation. You have no idea whether 80 million BlackBerry users -- especially those issued their devices before BYOD policies -- ever heard of BB10 or saw a BB10 device. The fact that BlackBerry sent them a spam email means nothing. The fact that BlackBerry might (emphasis: might) have targeted them with cheap banner ads means nothing.

    I would bet that if you asked people today that used BBOS devices in 2012 or 2013 if they knew anything about BB10 or its hardware, they would smile and say, "Blackberry? They went out of business about five years ago. I read about it in the news."

    Posted via CB10
    You are saying people carry a device around 10 to 14 hours a day and they don't kow what they are using. Then those same people have no problem finding out about Android and iPhones. Even though BlackBerry did a lot of marketing in the late 2000s through the first half of 2013?

    Blackberry even sponsored a formula one team, one of the most viable sports in the world.
    02-04-17 06:12 AM
  7. Adam Kowalczyk1's Avatar
    I am firmly on the page that the failure of BB10 had everything to do with timing coupled with 2-3 year phone contracts. BB10 was at least three years too late. BB10 needed to be a viable option in 2010. As much as I think the Android runtime has benefited owners of BlackBerry 10 phones, it would have mad more sense to have a BBOS runtime in the system to have an ecosystem to start.

    The BlackBerry PlayBook didn't help the situation. It distracted resources away from the end goal, even though it may have been a tool to help get there.

    I firmly blame Lazaridis and Balsille as they chose to do nothing or couldn't get the company headed in the right direction when the iPhone was released in 2007. The products that were rushed out in response to the iPhone didn't come close. The whole screen clicking thing didn't do it for me.

    Posted via CB10
    02-04-17 07:41 AM
  8. app_Developer's Avatar
    It is not true that only Panameras and Cayenne were affected....Sorry for the OT.
    I meant at Porsche. Were there diesel Macan's affected as well?
    02-04-17 08:08 AM
  9. MrScotian's Avatar
    If there was a solution for BB, I'm sure someone at BB would have figured it out. Those guys getting $250K - $2M/year in salary are actually pretty smart people who understand their parts of the business very well. But there was no real solution - BB was many years too late to be successful.
    I've seen this argument so many times and it makes me cringe each time because it boils down to the viewpoint of "Well boys, we're getting beaten to a pulp in the very industry that we dominated just a short time ago. Nothing to do now but give up!". Big salaries or not, too many people at BlackBerry should have been fired a long time ago for a total lack of vision and execution skills.

    Fortunes change good and bad. BlackBerry was king and was usurped by Apple who was then challenged by Google. Why exactly could BlackBerry not be a contender again? Simple, they don't know how to do it and they don't have anyone who does and it's been like that for years now.
    markmall and arkenoi like this.
    02-04-17 01:17 PM
  10. app_Developer's Avatar
    (There is a question of his integrity if he kept giving assurances about BB10 and insinuating that they might release new phones.)
    I actually do have a problem with statements that were made. Some of them weren't Chen himself, but he's responsible for his deputies and I think they were being disingenuous at times to sell inventory and burn down those purchase commitments. I'm uncomfortable with some of that, even though I understand the difficult financial position they were in.

    (BTW, I've been trying to find a better way to explain why the "half-assed" production and sales of phones was actually the safest and cheapest option that Chen could choose. You and I both agree they went at it half-***. All I'm saying is that this was the rational choice that Chen made. Their purchase commitments are a key reason why that is true. The other is investor confidence.)

    None of this changes my underlying opinion that BB10 had a chance if marketed properly and making a better attempt at its success was the best business choice for Blackberry. I think this was true even after the BoD freaked out and tried to sell the company in a public fire sale. In fact, I think that it might even be true today if you had the right talent in management.
    Fair enough. We can just agree to disagree on that. I think that particular horse is long gone at this point, and you think there is enough value in the OS for someone to press on with it and make it work financially.

    [Chen] clearly does not understand anything approaching "consumer" ("prosumer," whatever) electronics. I'm not sure he understands how to market and sell software for that matter.
    I agree with this, including the software side. This really worries me on the software side, in fact. These skills are more important in consumer electronics, but that doesn't mean you can get away without decent marketing and communications and PR skills in other markets.
    Last edited by app_Developer; 02-04-17 at 01:46 PM.
    02-04-17 01:34 PM
  11. early2bed's Avatar
    A case can be made that BlackBlackberry, over the past decade, simply did not have the intrinsic capabilities to respond to the way the smartphone market was headed. Apple started out in 2007 with zero smartphone market-share but they did have a fully-developed PC operating system, a loyal fan base, and some of the best talent in software, hardware-design, marketing, etc. They definitely weren't just a bunch of engineers. Google started out with zero market-share, also, but they had unprecedented consumer mindshare and the deep pockets to buy the talent and time to gradually make Android a success.

    Both Palm and BlackBerry started off with marketshare but needed to acquire/build a new OS to replace their legacy one. Both were hampered financially. Investors expected them to keep it going but it's really a painful reboot. What they had to do was actually harder and they had less overall talent and other resources. I don't think that either really had a chance from 2007 on because smartphones became more like PCs, media-players, and internet devices and less like PDAs or phones. BlackBerry was really a pager company until 2003.

    I don't know what Microsoft's excuse is. They had everything they needed except for the vision.
    southlander likes this.
    02-04-17 03:15 PM
  12. Troy Tiscareno's Avatar
    I've seen this argument so many times and it makes me cringe each time because it boils down to the viewpoint of "Well boys, we're getting beaten to a pulp in the very industry that we dominated just a short time ago. Nothing to do now but give up!". Big salaries or not, too many people at BlackBerry should have been fired a long time ago for a total lack of vision and execution skills.
    I'm talking about BB10 at launch in 2013 - it was already way too late by then; there was no way to win.

    You're absolutely right that management (read: Mike Lazaridis) should have been replaced in 2007 (if not before) for failing to take the iPhone seriously and for not having a modern OS in the works since rumors of an Apple smartphone began in 2005. The race for smartphone ecosystems happened between 2008 and 2010/2011, and Apple and Google won, and the race was effectively over. Releasing a new platform in 2013 to try to compete in a race that was already long over was not a smart idea, because it couldn't be successful. BB did it anyway and lost around $10B in cash and assets, and did further damage to their brand - but that whole plan was Mike's plan, even if he wasn't around for the final phase himself (his hand-picked deputy Heins was, though).

    Still, it's important to make the distinction: the critical time was 2007-2010, and in that time, BB had nothing even remotely competitive. You can't ignore or dismiss that time, though many people here do. But that's when BB's chance to win or lose happened. BB lost, and by 2013, there was no path to victory for BB.
    eshropshire likes this.
    02-04-17 03:17 PM
  13. app_Developer's Avatar
    I don't know what Microsoft's excuse is. They had everything they needed except for the vision.
    Microsoft has a big disadvantage compared to Google in their business model. Microsoft gets paid for software. Google gets paid for having eyeballs. So in a rapidly maturing market where manufacturers were rushing to make affordable smartphones, they all rushed to the Google model where the manufacturer gets paid instead of the one where manufacturers pay Microsoft.

    That's a tough thing to overcome, when your competitor is paying your customers and you're charging them.
    southlander likes this.
    02-04-17 03:27 PM
  14. Adam Kowalczyk1's Avatar

    I don't know what Microsoft's excuse is. They had everything they needed except for the vision.
    I am of the opinion that Microsoft has the vision, but blew the execution. One app, multiple targets. Run on your phone, tablet and PC. Seamless movement of ideas and data. Time will likely execute their vision as phones become as powerful as desktop systems.


    Posted via CB10
    elfabio80 likes this.
    02-04-17 03:59 PM
  15. early2bed's Avatar
    Microsoft has a big disadvantage compared to Google in their business model. Microsoft gets paid for software. Google gets paid for having eyeballs. So in a rapidly maturing market where manufacturers were rushing to make affordable smartphones, they all rushed to the Google model where the manufacturer gets paid instead of the one where manufacturers pay Microsoft.

    That's a tough thing to overcome, when your competitor is paying your customers and you're charging them.
    I don't think there's any reason why Microsoft needed to get paid for their smartphone OS - not when they have cash cows like Windows and Office. They made that kind of long-term investment with Xbox. They certainly had better access to hardware partners than Apple and Google did and plenty of leverage. I don't see that they were at any inherent disadvantage except for lack of vision and lack of talent.

    I am of the opinion that Microsoft has the vision, but blew the execution. One app, multiple targets. Run on your phone, tablet and PC. Seamless movement of ideas and data. Time will likely execute their vision as phones become as powerful as desktop systems.
    I'd say that for most consumers, desktops are being replaced by mobile devices. Consumers are using Windows less and mobile operating systems more. ChromeBooks are already winning the education space. I've been convincing many of my friends and family to drop Windows and adopt iOS and Chrome. The mobile operating systems are getting more powerful every year while Microsoft is trying to lighten-up and simplify Windows for consumers. Every year, fewer and fewer consumer applications require a .exe so Microsoft is waiting for customers and apps that will never come.

    As mobile hardware becomes more powerful, they are going to replace Windows rather than adopt it. The idea that a mobile device should ideally run Windows is a kind of functional fixation - focusing on how it does something rather than what it does.
    Last edited by early2bed; 02-04-17 at 04:28 PM.
    02-04-17 04:01 PM
  16. Soulstream's Avatar
    I am of the opinion that Microsoft has the vision, but blew the execution. One app, multiple targets. Run on your phone, tablet and PC. Seamless movement of ideas and data. Time will likely execute their vision as phones become as powerful as desktop systems.


    Posted via CB10
    I don't think they blew their execution. The vision you talk of is pretty recent (started with windows 10). They couldn't have implemented it sooner.

    Why? Because the mobile hardware wasn't yet powerful (or efficient) enough to run such apps. Processing power of a more complicated app is a lot larger than for facebook/snapchat.
    02-04-17 04:03 PM
  17. app_Developer's Avatar
    I don't think there's any reason why Microsoft needed to get paid for their smartphone OS - not when they have cash cows like Windows and Office. They made that kind of long-term investment with Xbox. They certainly had better access to hardware partners than Apple and Google did and plenty of leverage. I don't see that they were at any inherent disadvantage except for lack of vision and lack of talent.
    Yet it took years for them to actually offer Windows Phone for free. By the time they did, it was way too late. You could argue that Google was more visionary, but I think it's simpler than that. Google had a direct way to monetize Android from day 1. That was (and still is) their big advantage: they make a lot of money by paying manufacturers to choose their OS.

    OTOH, the Windows and Office BU's at Microsoft weren't willing to subsidize Windows Phone back in 2008/09 (when this war could still have been won). You can understand why when you think about how Microsoft actually makes money. Subsidizing Xbox is more straightforward, because there was a path to revenue there. But what is the path to revenue for Windows Phone if you're going to pay manufacturers to use it?
    02-04-17 04:47 PM
  18. markmall's Avatar
    You are saying people carry a device around 10 to 14 hours a day and they don't kow what they are using. Then those same people have no problem finding out about Android and iPhones. Even though BlackBerry did a lot of marketing in the late 2000s through the first half of 2013?

    Blackberry even sponsored a formula one team, one of the most viable sports in the world.
    You think a sticker on an F1 car educated consumers about BB10? This was part of Blackberry's problem.

    My former assistant was using a Z10 as recently as a year ago and thought Blackberry was already out of business.
    02-05-17 03:40 AM
  19. eshropshire's Avatar
    A case can be made that BlackBlackberry, over the past decade, simply did not have the intrinsic capabilities to respond to the way the smartphone market was headed. Apple started out in 2007 with zero smartphone market-share but they did have a fully-developed PC operating system, a loyal fan base, and some of the best talent in software, hardware-design, marketing, etc. They definitely weren't just a bunch of engineers. Google started out with zero market-share, also, but they had unprecedented consumer mindshare and the deep pockets to buy the talent and time to gradually make Android a success.

    Both Palm and BlackBerry started off with marketshare but needed to acquire/build a new OS to replace their legacy one. Both were hampered financially. Investors expected them to keep it going but it's really a painful reboot. What they had to do was actually harder and they had less overall talent and other resources. I don't think that either really had a chance from 2007 on because smartphones became more like PCs, media-players, and internet devices and less like PDAs or phones. BlackBerry was really a pager company until 2003.

    I don't know what Microsoft's excuse is. They had everything they needed except for the vision.
    I have to disagree, in 2007 BlackBerry ruled the business phone market. Apple was just getting their feet wet. They only went after the consumer market. They made mistakes and also were lucky. Jobs said later he never anticipated the app market taking off. They slowly over time started attacking the business market.

    Blackberry's problem was not a lack of skills or resources in 2005-2008, it was their arrogance. Also, when you own a great hammer every problem looks like a nail. They laughed at iOS and Android. They tried to bully providers into not building 3G networks (read Losing the Signal). They stuck with the tools not toys mentality - fully misunderstanding how people wanted to use smartphones. Blackberry's biggest problem was a complete lack of vision. I always assumed this was because of the dual CEO model - way too many. I can't think of a worse model, like having two ship captains each trying to steer a ship but no one to be in charge.

    The next big mistake was to make a insider the next CEO. Again I can only assume, but my guess this was done to keep the skeletons hidden. What BlackBerry needed was some one to come in and clean house and shake up the company. Thor was not the right guy, he continued to follow Jim and Mike's plans. He had no vision. When everything fell apart by early summer of 2013 he was totally lost. The strategy had failed and had no backup plan. He gave up and put the company up for sale.
    app_Developer and arkenoi like this.
    02-05-17 03:48 AM
  20. eshropshire's Avatar
    I don't think they blew their execution. The vision you talk of is pretty recent (started with windows 10). They couldn't have implemented it sooner.

    Why? Because the mobile hardware wasn't yet powerful (or efficient) enough to run such apps. Processing power of a more complicated app is a lot larger than for facebook/snapchat.
    I believe Microsoft's mobile problem was the same as BlackBerry. They both had big bases to protect and just assumed their install base would follow where they led. People forget MS had a decent mobile market share with Win 6x mobile when the iPhone was released . The product stunk, but it was one of the few smartphone alternatives in 2006. I had one for several years.

    Balmer was Microsoft's biggest problem. He almost screwed up their cash cow with the release of Windows 8, trying to make the desktop operate like the phone. Corporations stayed away in droves. No corporations wanted to retrain their staff. Not to mention the win 8 UI was awful. Getting rid of Balmer was the best move Microsoft ever made.

    Microsoft's new strategy is to embrace iOS and Android. Microsoft is ore interested in having their apps and services embraced on these platforms. Most run better on these platforms than on Windows Mobile. People here keep talking about the fantom Suface phone. Maybe it will come, but I still have doubts by the time it might be released Microsoft mobile market share will be well under 1%. Most of the old faithful have left because of the issues with Win 10 Mobile that have only been resolved in the last few months.
    02-05-17 04:06 AM
  21. MrScotian's Avatar
    You think a sticker on an F1 car educated consumers about BB10? This was part of Blackberry's problem.

    My former assistant was using a Z10 as recently as a year ago and thought Blackberry was already out of business.
    Exactly! BlackBerry just doesn't get marketing at all. With so many years on so many still aren't aware that BlackBerry ISN'T dead and gone... that is a HUGE marketing failure.
    02-05-17 08:30 AM
  22. MrScotian's Avatar
    I'm talking about BB10 at launch in 2013 - it was already way too late by then; there was no way to win..
    I agree with the other points you made in your reply but what I cannot accept is that there was "..no way to win". Apple at one time had nothing and they usurped the biggest companies in mobile. BlackBerry would not have been able to win in the sense of total domination, but it's a far drop from there to the pathetic market share they have had for the past few years. BlackBerry had good products once BB10 came along and they completely blew all of those product launches. Where was the marketing effort to make the consumer want a BlackBerry again? I'm still waiting.. Honestly, if I didn't own a BlackBerry and post here, I wouldn't have any knowledge of their continued existence either. I really don't think that they could competently market a grocery bag to a grocery store and that this above all else IMO is their greatest long-standing shortcoming.
    02-05-17 08:41 AM
  23. early2bed's Avatar
    So, you order 10 million BB10 handsets and launch with a $100 million ad campaign. They look good and customers start buying them. What happens when they get home and find that their daily-use apps don't work well or work at all? Do you really expect them to install some sort of work-around or third-party substitute? How many of your friends and family and friends use BB10 devices given all of the advice and support available from you? It sounds like a lot of expensive returns which carriers absolutely hate. That's how you end up launching phones with no carrier support.
    Troy Tiscareno likes this.
    02-05-17 10:23 AM
  24. markmall's Avatar
    Exactly! BlackBerry just doesn't get marketing at all. With so many years on so many still aren't aware that BlackBerry ISN'T dead and gone... that is a HUGE marketing failure.
    Right, and I thought this would be Chen's very first task when he took over.

    Even those finance people and lawyers that heard about the Z30 and Passport stayed away because they thought BlackBerry was going under any day. I got this firsthand when I tried to convince someone to buy a Z30. Advertising can instill confidence in a brand. (Ok, now someone say they couldn't afford it without any knowledge how much working capital BlackBerry had and how much BlackBerry would need to spend to be effective. My point is this was not an optional ad buy. It was more essential than one of the startups Chen bought to boost his "software" revenues for the quarter.)

    Posted via CB10
    02-05-17 04:46 PM
  25. markmall's Avatar
    I agree with the other points you made in your reply but what I cannot accept is that there was "..no way to win". Apple at one time had nothing and they usurped the biggest companies in mobile. BlackBerry would not have been able to win in the sense of total domination, but it's a far drop from there to the pathetic market share they have had for the past few years. BlackBerry had good products once BB10 came along and they completely blew all of those product launches. Where was the marketing effort to make the consumer want a BlackBerry again? I'm still waiting.. Honestly, if I didn't own a BlackBerry and post here, I wouldn't have any knowledge of their continued existence either. I really don't think that they could competently market a grocery bag to a grocery store and that this above all else IMO is their greatest long-standing shortcoming.
    Say it, brother!

    Posted via CB10
    02-05-17 04:47 PM
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