[hjc73734]

Yours and several others presumption here is that this is a 'brick and mortar' roll out. If they are primarily relying on web retailers ( Amazon and bestbuy.com ) then all that is necessary is that the phones are in the warehouses on the 31st. That's it. The managers at physical carrier retail stores won't know anything because they are not in the loop. Neither the managers at the physical BestBuy stores. They also are not initially in the loop. The store is simply just a "ship to location" delivery point.

Amazon has billions in server hardware that back stops it web site. There is no massive Blackberry rush that is going to crash their site which pre-orders might distribute out over time. If the phones are in the warehouse some human and/or robot will pick them up and box then as the orders come in. Done. Like Amazon doesn't ship millions of items per day anyway. And BestBuy.com isn't all that far behind. They move thousands phones per day anyway in their distribution system.

BlackBerry Mobile can get nation wide logistic scale by outsourcing to web retailers who already have USA nationwide scale. As long as the warehouses are stocked up early this week they can flip the switch on the 31st no problem.

If they only have enough to sell that closely matches their initial estimates of demand the "extra warning" before 31st does nothing. They aren't going to be able to sell what they don't have. More 'brick and mortar' sales sites just will dilute the supply even further.

yeah so.... why not officially tell us?

[bb10adopter111]

Business 101:

The problem with advertising for a niche product is that you have to find a place where the profit from the prospects who view the ad and will actually buy the item, who WOULD NOT have bought the item without the ad, offsets the cost of the ad.

A LOOK AT THE MATH
The problem with spending money on advertising for the KEYone is that it's a niche product, and it's very difficult to locate those few prospects who would buy the phone WITH advertising, but who would not buy the phone WITHOUT advertising. Let's say that the total US market (people who would potentially buy this phone) at $549 US is 3% of the estimated mobile phone population of 222 million, or 6.6 million people, and let's estimate that they keep their phones for an average of 24 months, so that, between June 1 and the end of the year, 7/12 of them, or 3.9 million might be convinced to buy the KEYone. Feel free to argue with my estimates, but only if you think it changes the outcome of the analysis.

So, below are the things that would have to to go PERFECTLY to produce that result:
-- unlimited effective marketing
-- great press
-- celebrity endorsements
-- product placement in media
-- 100% carrier support
-- Inventory available in every channel with no stock outs.

If they could magically do all that, 3.9M is the maximum sales in 2017 in the US.

Assuming retail markup is 30%, so that the average selling price (ASP) of the KEYone for TCL is $422, and assuming a 40% gross margin (GP) for TCL, which is unlikely given the difficulty of manufacturing a PKB phone. TCL makes a GP of $122 on each phone. Selling 3.9M phones, TCL could make $476M in gross profit in 2017. That's an absolute maximum, if they get 100% penetration in their market.

As a baseline, let's see what happens if TCL does no marketing or advertising. Based on sales of the Priv and Passport, we can estimate that they will sell about 500,000 phones.That seems like a a reasonable estimate for the low end. That means that they will earn a total GP of $61 million on $211M revenue if they do NOTHING more besides release the phone in sufficient quantities to prevent stock outs.

If they could somehow reach the other 3.4 million potential buyers, they could make an additional $415 million in GP.

Typical return on investment (ROI) expectations for advertising are 5:1, so TCL could spend up to $80M on all of the above items if they believed they could capture 100% of those 3.4 M potential buyers on the sidelines.

An $80 million budget is absolutely NOTHING in the US today. That wouldn't be enough to run 700 prime time TV ads, let alone get the phone into all the right channels, or do any of the other above things.

This is the business reality of a niche product like the KEYone. It's simply better business to focus on earned media (which has been generally great) and word of mouth.

Once the phone is available, we will likely see lots of low cost marketing, such as email and web promotions, but even then, don't expect too much, because it's not that kind of product.

[hjc73734]

Business 101:

The problem with advertising for a niche product is that you have to find a place where the profit from the prospects who view the ad and will actually buy the item, who WOULD NOT have bought the item without the ad, offsets the cost of the ad.

A LOOK AT THE MATH
The problem with spending money on advertising for the KEYone is that it's a niche product, and it's very difficult to locate those few prospects who would buy the phone WITH advertising, but who would not buy the phone WITHOUT advertising. Let's say that the total US market (people who would potentially buy this phone) at $549 US is 3% of the estimated mobile phone population of 222 million, or 6.6 million people, and let's estimate that they keep their phones for an average of 24 months, so that, between June 1 and the end of the year, 7/12 of them, or 3.9 million might be convinced to buy the KEYone. Feel free to argue with my estimates, but only if you think it changes the outcome of the analysis.

So, below are the things that would have to to go PERFECTLY to produce that result:
-- unlimited effective marketing
-- great press
-- celebrity endorsements
-- product placement in media
-- 100% carrier support
-- Inventory available in every channel with no stock outs.

If they could magically do all that, 3.9M is the maximum sales in 2017 in the US.

Assuming retail markup is 30%, so that the average selling price (ASP) of the KEYone for TCL is $422, and assuming a 40% gross margin (GP) for TCL, which is unlikely given the difficulty of manufacturing a PKB phone. TCL makes a GP of $122 on each phone. Selling 3.9M phones, TCL could make $476M in gross profit in 2017. That's an absolute maximum, if they get 100% penetration in their market.

As a baseline, let's see what happens if TCL does no marketing or advertising. Based on sales of the Priv and Passport, we can estimate that they will sell about 500,000 phones.That seems like a a reasonable estimate for the low end. That means that they will earn a total GP of $61 million on $211M revenue if they do NOTHING more besides release the phone in sufficient quantities to prevent stock outs.

If they could somehow reach the other 3.4 million potential buyers, they could make an additional $415 million in GP.

Typical return on investment (ROI) expectations for advertising are 5:1, so TCL could spend up to $80M on all of the above items if they believed they could capture 100% of those 3.4 M potential buyers on the sidelines.

An $80 million budget is absolutely NOTHING in the US today. That wouldn't be enough to run 700 prime time TV ads, let alone get the phone into all the right channels, or do any of the other above things.

This is the business reality of a niche product like the KEYone. It's simply better business to focus on earned media (which has been generally great) and word of mouth.

Once the phone is available, we will likely see lots of low cost marketing, such as email and web promotions, but even then, don't expect too much, because it's not that kind of product.

I don't think any of us really wanted to go to Econ 101. We just wanted to know where to buy and preferably pre-order so we could get first dibs. Which was what we expected the "Pre-Register" feature to give us.

The last smart phone promo I signed up for was the Huawei Honor 8. Huawei is not even recognized as much as BlackBerry although those that DO recognize it probably hold Huawei to a higher regard.

Weeks before the offical availability date, I got emails on where to buy, promos and free pack in bonuses from several brick and mortar AND online outlets. Various pack ins and gift card promos depending on the retailer. Amazon and Best Buys had placeholders with pre orders and availability dates.

I ordered from Best Buys days earlier and picked up on release day.

Where's TCL less than 24hrs before sales date?

Anyways, I'm still buying the KEYone. Just observing and comparing to my past experiences and TCL seems incompetent, unwilling, or just careless about the product.

It's like finally getting your order from McDonalds. Just give it to me already so I can eat!

[kodos78]

The economy lesson is embarrassing. I pre-registered. I would expect an email saying, "Get ready! The wait is almost over! Head over to Bestbuy.com or Amazon.com at 12:01am EST to order your very own KeyOne".

Maybe that lesson comes in Econ 201.

[thoms333]

look all i want to know is if I buy the thing unlocked tomorrow can I use it on Verizon .. that's it, and it's ASHAME a day out we still don't have the answer to this question ...

[gallopiton]

i learned many moons ago, which by the way could apply for both your business and your personal life, that if you need to explain/justify/guess too often, then you are failing at communication and very likely there is a simpler/better way to do what you are doing...

there you go, life 101 hahaha...

[ltoncb]

Following up, is this going to be a situation where scalpers buy up all the KeyOnes and then sell them for a profit? I mean the Blackberry KEYone is available on U.S. Amazon right now. It is just $869.

First, it is always important to look at who is the seller and shipper on Amazon. Once there is a "sold and shipped by Amazon" entry then those other ones won't be the first in a search result list at all (unless they pay a significant amount to Amazon). I think that entry is more a sucker (don't pay attention) trap than scalpers.

Second, if it sells out and there is a "shortage" and then magically pops up in some carrier's retail in a week or so .... profit. Demand will shift there and carrier will have a nice bump in sales.

I don't think it is going to be scalpers as much as real buyers primarily draining the supply. For some amount of range Amazon and Bestbuy.com will probably take "requests" for projected supply refills they will get.

Scalping works for concerts/games because there is a fixed number of seats for an event. BlackBerryMobile (TCL) is going to be making more phones all of June and July. There may be a fixed number of phones on the 31st, but two weeks later there is an extremely high chance there will be more. All a buyer has to do is get in line.

I think the scalpers will be in the 100's of phones range not thousands or 10's of thousand range. That is enough so that Amazon and BestBuy.com will be charging full price for the device and have extremely low inventories. That should make them (and BBMobile ) happy. If BBMobile can get the phone through July-August without a very large sag in the average selling price then this will probably be a successful phone. There is very low incentive for BBMobile to make a significant oversupply of phones. That is exactly one of the primary mistakes that killed BB Inc. phone business over time.

[donnation]

Business 101:

The problem with advertising for a niche product is that you have to find a place where the profit from the prospects who view the ad and will actually buy the item, who WOULD NOT have bought the item without the ad, offsets the cost of the ad.

A LOOK AT THE MATH
The problem with spending money on advertising for the KEYone is that it's a niche product, and it's very difficult to locate those few prospects who would buy the phone WITH advertising, but who would not buy the phone WITHOUT advertising. Let's say that the total US market (people who would potentially buy this phone) at $549 US is 3% of the estimated mobile phone population of 222 million, or 6.6 million people, and let's estimate that they keep their phones for an average of 24 months, so that, between June 1 and the end of the year, 7/12 of them, or 3.9 million might be convinced to buy the KEYone. Feel free to argue with my estimates, but only if you think it changes the outcome of the analysis.

So, below are the things that would have to to go PERFECTLY to produce that result:
-- unlimited effective marketing
-- great press
-- celebrity endorsements
-- product placement in media
-- 100% carrier support
-- Inventory available in every channel with no stock outs.

If they could magically do all that, 3.9M is the maximum sales in 2017 in the US.

Assuming retail markup is 30%, so that the average selling price (ASP) of the KEYone for TCL is $422, and assuming a 40% gross margin (GP) for TCL, which is unlikely given the difficulty of manufacturing a PKB phone. TCL makes a GP of $122 on each phone. Selling 3.9M phones, TCL could make $476M in gross profit in 2017. That's an absolute maximum, if they get 100% penetration in their market.

As a baseline, let's see what happens if TCL does no marketing or advertising. Based on sales of the Priv and Passport, we can estimate that they will sell about 500,000 phones.That seems like a a reasonable estimate for the low end. That means that they will earn a total GP of $61 million on $211M revenue if they do NOTHING more besides release the phone in sufficient quantities to prevent stock outs.

If they could somehow reach the other 3.4 million potential buyers, they could make an additional $415 million in GP.

Typical return on investment (ROI) expectations for advertising are 5:1, so TCL could spend up to $80M on all of the above items if they believed they could capture 100% of those 3.4 M potential buyers on the sidelines.

An $80 million budget is absolutely NOTHING in the US today. That wouldn't be enough to run 700 prime time TV ads, let alone get the phone into all the right channels, or do any of the other above things.

This is the business reality of a niche product like the KEYone. It's simply better business to focus on earned media (which has been generally great) and word of mouth.

Once the phone is available, we will likely see lots of low cost marketing, such as email and web promotions, but even then, don't expect too much, because it's not that kind of product.

This is great and informative, but has nothing to do with the topic at hand. It wouldn't cost BlackBerry a thing to send out something regarding where the device can be purchased. It's an email for God's sakes. Those of us who registered to be notified DESERVE at least that.

Forget all the marketing and advertising stuff. Just send me an email on where I can either walk in and buy it or purchase it online. THAT is business 101, which is to keep your customers informed of what is happening.

[ltoncb]

look all i want to know is if I buy the thing unlocked tomorrow can I use it on Verizon .. that's it, and it's ASHAME a day out we still don't have the answer to this question ...

Verizon's bands are right there on the specs page. https://www.blackberrymobile.com/us/specifications.php

Could Verizon give you a hard time activating a phone that works on their system? There is a decent track record for that, but that really isn't BlackBerryMobile's problem. (they have done that to previous all-network, unlocked Nexus phones in the past. ) If BBMobile have run the phone through Verizon's certification maze then that is all they needed to do..... whether Verizon wants to play dumb and kneecap it is really out of their control.

If Verizon is being a jerk there is little to no upside in BBMobile pointing that out publicly ahead of time.

[megafan2000]

This is great and informative, but has nothing to do with the topic at hand. It wouldn't cost BlackBerry a thing to send out something regarding where the device can be purchased. It's an email for God's sakes. Those of us who registered to be notified DESERVE at least that.

Forget all the marketing and advertising stuff. Just send me an email on where I can either walk in and buy it or purchase it online. THAT is business 101, which is to keep your customers informed of what is happening.

I'd also like to add on the BBmobile page it still says:
Sign-up now for exclusive BlackBerry KEYone pre-order offers

What exactly are these offers? Because I personally would like a bundle that comes with the case, or a micro sd card, or an extra charger or something like that. A little information would be nice to know what else I need to get for myself tomorrow.

[donnation]

I'd also like to add on the BBmobile page it still says:
Sign-up now for exclusive BlackBerry KEYone pre-order offers

What exactly are these offers? Because I personally would like a bundle that comes with the case, or a micro sd card, or an extra charger or something like that. A little information would be nice to know what else I need to get for myself tomorrow.

Apparently the offer is going to be that the phone Is now available, but you'll have to guess on where that might be.

[Lobwedgephil]

I would just like to know the time Best Buy and Amazon will have it available on their respective websites.

[SeanSolo]

I would just like to know the time Best Buy and Amazon will have it available on their respective websites.

Check at midnight and every 5 minutes thereafter

[Lobwedgephil]

Check at midnight and every 5 minutes thereafter

What time zone? See the problem?

[kvndoom]

Same brand, different manufacturer, same lousy product launch. Something tells me I have a better chance of winning powerball than seeing "two more Blackberry phones" from TCL this year.

[SeanSolo]

What time zone? See the problem?

Midnight eastern. Everything that matters is based on New York City.

[Frenzytom]

Midnight eastern. Everything that matters is based on New York City.

LOL, coming from NYC as well and boy, we think the world revolves around us. I am hitting refresh every minute after 12am EST tonight!

[SeanSolo]

LOL, coming from NYC as well and boy, we think the world revolves around us. I am hitting refresh every minute after 12am EST tonight!

It DOES revolve around us! I'm in Chelsea haha.

[selchukny]

what a unprofessional phone release.. thats the reason BB fans go use different phones. im so close to that way

[bb10adopter111]

I don't think any of us really wanted to go to Econ 101. We just wanted to know where to buy and preferably pre-order so we could get first dibs. Which was what we expected the "Pre-Register" feature to give us.

The last smart phone promo I signed up for was the Huawei Honor 8. Huawei is not even recognized as much as BlackBerry although those that DO recognize it probably hold Huawei to a higher regard.

Weeks before the offical availability date, I got emails on where to buy, promos and free pack in bonuses from several brick and mortar AND online outlets. Various pack ins and gift card promos depending on the retailer. Amazon and Best Buys had placeholders with pre orders and availability dates.

I ordered from Best Buys days earlier and picked up on release day.

Where's TCL less than 24hrs before sales date?

Anyways, I'm still buying the KEYone. Just observing and comparing to my past experiences and TCL seems incompetent, unwilling, or just careless about the product.

It's like finally getting your order from McDonalds. Just give it to me already so I can eat!

Sorry if my post was OT for you. I think I just got tired of the "KEYone launch is awful " complaints that are based on false assumptions about the market for the KEYone, which is likely < 1M.


Posted with my trusty Z10

[ridemaster]

OP,
They did say the 31st availability, not the day prior. get a grip and stop posting negative **** before the official launch day.

[ray689]

Sorry if my post was OT for you. I think I just got tired of the "KEYone launch is awful " complaints that are based on false assumptions about the market for the KEYone, which is likely < 1M.


Posted with my trusty Z10

Shouldn't that be more reason to inform those few people that will buy it where and how they can?

[bb10adopter111]

Shouldn't that be more reason to inform those few people that will buy it where and how they can?

Technically, only if you think not doing so will lead to lost sales. But, even then, I think it would make sense to wait until consumers can take action to notify them. For the most part, I've only seen two kinds of complaints about communications:

1) I want this phone! Where can I buy it?
2) This is another example of why I don't want the buy a BlackBerry phone.

Neither of those groups are likely to change their purchasing plans because of an email when no phone is available, so I wouldn't send one.

Posted with my trusty Z10

[theBanker514]

Relax guys. It will come. Good things take time. To be honest, I was feeling the same way for the past month but now that we're one day away from the "announced" release I am more relaxed. I've been a Blackberry fan since 2007. I love the brand, and would love to have the KEYone. I hope you all remember that there are a lot of things going for all of you beyond having this phone in your hand right now.

[p51]

Probably not. BB hasn't necessarily committed to stocking them in stores, but you'll be able to buy it online and/or order it from the store for later store pickup.

You need to remember that this is a niche phone with a very small market - you're just not going to have the same options for buying it as you would with more popular phones. That's where BB's phone business is today.

Totally agree, but will also say this launch definitely has room for improvement. Communication from TCL has been TERRIBLE!!
Why is honesty & transparency so difficult for companies? Much less expensive to email or tweet than to sponsor meet ups which feel designed to pacify potential consumers & deflect attention from delays and lack of communication.
We're adults. Just keep it real. Despite my feelings on the entire launch process I"m still ordering one as soon as they're available.