[lnichols]

Why does the passport need to be that though? Why not the Z3 which was built for this very reason?

Posted via CB10

Since some horrible car analogies have already been used, I'll add one. VW tried to release a high end car called the Phaeton that was superior to the Audi A8 in luxury. The plan was to try to make VW brand luxury, and Audi luxury/sport. Phaeton failed and so did the plan to take VW, the people's car, to luxury. They are not known for that and people weren't going to pay too dollar for the brand.

The BlackBerry brand image right now is garbage. Other than security they do not offer anything superior to other brands in the view of many, and in many ways are viewed as inferior. The other brands have shown now they can get FIPS . There are secure solutions like Citrix Xenapp that are secure enough. So if you are going to pay premium, you expect it to be a premium brand. BlackBerry is not a premium brand in most markets right now.

Posted with a BlackBerry Z10

[collinc93]

But BlackBerry has no positive differentiators...



You don't need a BlackBerry to get BES...

Did you get the memo where iOS completely and utterly dominates the enterprise right now?

Yes, there are SOME specialised areas where a BlackBerry is actually needed, but that's a niche of a niche within a niche.
Nothing to get 10 million devices out of the door.

BlackBerry is neiter a premium manufacturer anymore, nor does it offer what the competition offers.
The only reasonable choice, would be to go down with the prices.
Significantly fo go down.

Every single BlackBerry product branded with BB10 or QNX was overpriced and failed in the market place.
So yeah, margins are nice, but when you don't sell anything, while having high-margin products, then you will fail nonetheless.

As I said above:
The comparison with Mercedes is asinine.
Mercedes actually adds some value to their products.
Be it the safety features, the comfort features, or the prestige features.
Mercedes also has some competition with Audi, BMW, Lexus and Infinitiy for example.

Now, when you buy a BlackBerry, you basically get less of everything, not more (apart from a BES coupled BlackBerry. There you gain security. But the other platforms are also managed through an MDM, so yeah...)

But the analogy fails at the most basic level:
BlackBerry is no premium manufacturer anymore.
The brand and the products aren't worth a premium.
Which is in stark contrast to a Mercedes.



Just like the BlackBerry stock traded on potential before the BB10 launch, to then fall into the abyss, the stock once again trades on potential.
It all depends on if the Classic/Passport/BES 12 will be a success.

The uptick we saw last quarter, happened because of cheaper devices and maybe a better image (as in, BlackBerry won't disappear in 1 quarter).
Which directly contradicts your thesis of high prices being needed.
BlackBerry is not a premium manufacturer anymore and the prices have to reflect that.
Going heads-on against Samsung and Apple with their pricing, won't work, as the past proves.




Why are you stopping here, instead of going further with your analysis?

The perceived value of a Samsung GS5 gets diminished the moment a One Plus One enters the market with the same package at half the price.

The high-end market, with high-end prices will start to shrink, just as we saw it with the PC market.
As the need for a high-end device disappears, because the added value shrinks, we will see the evolution of most manufacturers offering cheaper phones, that nearly provide the same experience as their high-end counter parts.

There is a reason why Apple owns 80%+ of the 1000$+ Notebook market:
Nobody else is able to convey the same added value.

And now explain me why the hell BlackBerry should be able to sell mid-range phones, with negative differentiators, like other high-end phones.
You get the worst ecosystem in the mobile market, the worst app store, one of the worst experience in terms of after sale support and one of the worst $/spec ratios.

BlackBerry doesn't commad a premium price.
It's just that simple.



The Passport will not be successfull in the health-care sector.
Physicians already have their iPads with medical iOS apps.

Every physician who wants to do his work on a 4.5 inch screen, instead of a 10 inch screen, sadly got it wrong (same for architects).

Now onto the portfolio: Actually, the portfolio is lacking quite a bit.

There is no reap low-end device, a la Moto G or Nokia Lumia 520.
There is no high-end all touch device (nope, the Z30 is a midrange device in the lower tier of the midrange) .
There is also no high-end touch on the horizon.
There is no reason to still have the Z10 (except for unsold inventory), since the Z3 is basically the same thing.
BlackBerry's focus on qwerty devices, is a huge misinterpretation of the market as well.

So no, I wholeheartedly disagree.
The portfolio is pretty bad.

Posted via CB10

wow...such an eloquent..ahm....grandiose mumbo jumbo....

[collinc93]

I hope the Passport isnt priced for 'every hand'---price it for the correct hands....I can't be bothered with all the semantics and arguments and counter arguments..waste of time

[anon(3066922)]

But BlackBerry has no positive differentiators...
***productivity, reliability (QNX), open architecture (iOS 8 is looking to mimic BB10 in a lot of ways), lack of spam***
You don't need a BlackBerry to get BES...
***2nd cornerstone of Blackberry is software licensing, this is a good thing. Blackberry security is built in from the first line of code (after microkernel), iphone and android with BES is not***
Did you get the memo where iOS completely and utterly dominates the enterprise right now?
***yes, blackberry made some mistakes when transitioning from BES 5 to BES 10 however government agencies and law offices are primarily blackberry's. Also Enterprise users are asking for their blackberry's back***
Yes, there are SOME specialised areas where a BlackBerry is actually needed, but that's a niche of a niche within a niche.
***and case and point... high margin, low volume***
Nothing to get 10 million devices out of the door.
***it will take time and good business decisions***
BlackBerry is neither a premium manufacturer anymore, nor does it offer what the competition offers.
***you taking hardware or software? Hardware wise, again does it need to offer 3 GB RAM that it can't utilize? Software wise, yes android and iOS have more value. Not sure why this means Blackberry needs to drop the price on their high(er) end phone when there are other options for cheaper for the same OS***
The only reasonable choice, would be to go down with the prices.
Significantly fo go down.
***I won't let you run my company, you would burn all my cash by giving away product in hopes that everyone would want to buy one after we don't make money on the first 5 million units***
Every single BlackBerry product branded with BB10 or QNX was overpriced and failed in the market place.
***Define failed? Didn't sell 10 million devices on day one? The fact that they didn't outsell legacy devices? Just wondering? Again they could have repackaged an iphone and still would have failed. They missed the market***
So yeah, margins are nice, but when you don't sell anything, while having high-margin products, then you will fail nonetheless.
***Then wouldn't that mean they shouldn't have made the passport then vs. making a more expensive device and sell it for less?***

As I said above:
The comparison with Mercedes is asinine.

#1 Mercedes actually adds some value to their products. *** as does Blackberry. Is Mercedes better than Bentley, BMW, Infinity and Audi? In the same way Ford is no different than GM, Chrysler, Hyundai. There is a market and they are fighting for part of the market.

#2 Be it the safety features, the comfort features, or the prestige features. *** whether it be microsoft sync, my car connect or QNX

#3 Mercedes also has some competition with Audi, BMW, Lexus and Infinitiy for example *** In the same way Ford is no different than GM, Chrysler, Hyundai. There is a market and they are fighting for part of the market.

#4 Now, when you buy a BlackBerry, you basically get less of everything, not more (apart from a BES coupled BlackBerry. There you gain security. But the other platforms are also managed through an MDM, so yeah...) *** no, you get less apps and not as good of camera (think less of what it offers and more about what you actually need. Does what you are looking for meet
your needs. I could care less that iphone offers photo superior photo editing. I do this on my macbook with a full blown photo editor). I don't need that (some claim to)

#5 But the analogy fails at the most basic level:
BlackBerry is no premium manufacturer anymore *** I think iPhone is the only premium phone, android is not a premium OS... they have apps but aside from that what do they have that is any good? a 5" screen? BB10 doesn't have spam or a broken OS. BB10 is the most refined OS in the market.

#6 The brand and the products aren't worth a premium *** Perception... I would value the larger real estate of the passport to be worth it. The new keypad etc.

#7 Which is in stark contrast to a Mercedes *** not comparing Blackberry quality to mercedes but comparing business model (differentiators included) to mercedes... big difference

#8 Just like the BlackBerry stock traded on potential before the BB10 launch, to then fall into the abyss, the stock once again trades on potential *** as well as the other thousands of stocks... speculation is the name of the game... is it going to meet or exceed the streets expectations?

#9 It all depends on if the Classic/Passport/BES 12 will be a success *** well I hope it doesn't depend on IOT

#10 The uptick we saw last quarter, happened because of cheaper devices and maybe a better image (as in, BlackBerry won't disappear in 1 quarter).
Which directly contradicts your thesis of high prices being needed *** I didn't say prices I said margins BIGGGGG difference. Maybe that is what you are not understanding. Gross margin on sales.

#11 BlackBerry is not a premium manufacturer anymore and the prices have to reflect that *** Then sell only Q5 and Z3 but keep margins are 40-50% and sell price down.

#12 Going heads-on against Samsung and Apple with their pricing, won't work, as the past proves *** You are not pricing against apple or samsung, you are pricing based on costs. This is a carrier decision

#13 Why are you stopping here, instead of going further with your analysis? ***?

#14 The perceived value of a Samsung GS5 gets diminished the moment a One Plus One enters the market with the same package at half the price.
The high-end market, with high-end prices will start to shrink, just as we saw it with the PC market.
As the need for a high-end device disappears, because the added value shrinks, we will see the evolution of most manufacturers offering cheaper phones, that nearly provide the same experience as their high-end counter parts *** I completely disagree. The market is priced based on what people are willing to pay. Have you noticed that every kid has an iphone or Samsung S5 now (in north america)? Do you think that if it was about pricing that everyone would have a samsung low end device?

#15 There is a reason why Apple owns 80%+ of the 1000$+ Notebook market:
Nobody else is able to convey the same added value *** Branding and marketing only, pc sales are going back up because people are realising what a pain it is to be looked into apples ecosystem. Parents think their kids lives will be better if they have a mac when they go to school.

#16 And now explain me why the hell BlackBerry should be able to sell mid-range phones, with negative differentiators, like other high-end phones.
You get the worst ecosystem in the mobile market, the worst app store, one of the worst experience in terms of after sale support and one of the worst $/spec ratios *** well that is the question but it isn't about lowering margins

#17 BlackBerry doesn't command a premium price *** again if you don't see the value you have options including options within the Blackberry family that are cheaper

#18 It's just that simple *** Agreed, again if you don't see the value you have options including options within the Blackberry family that are cheaper

#19 The Passport will not be successfully in the health-care sector *** Let's hope but you most likely are right. By the way it is a niche of a niche sector of the market

#20 Physicians already have their iPads with medical iOS apps *** I would love to see some real numbers on iPhone usage with medical records which is the target of Blackberry and Passport

#21 Every physician who wants to do his work on a 4.5 inch screen, instead of a 10 inch screen, sadly got it wrong (same for architects) *** I think it would be a combination of iPad's and phones (phones for out of hospital)

#22 Now onto the portfolio: Actually, the portfolio is lacking quite a bit.
There is no reap low-end device, a la Moto G or Nokia Lumia 520 *** Okay
There is no high-end all touch device (nope, the Z30 is a midrange device in the lower tier of the midrange) *** Agreed, but according to you high end is apps and ramming a phone with un-necessary hardware spec's
There is also no high-end touch on the horizon *** Although I don't need anything more than a Z30 I kind of want something higher than a Z30
There is no reason to still have the Z10 (except for unsold inventory), since the Z3 is basically the same thing *** A lot of people like the Z10 form factor and Z3 is a 5" value phone with good spec's

#23 BlackBerry's focus on qwerty devices, is a huge misinterpretation of the market as well *** which market? Consumer or business, either way people like their QWERTY keyboard

So no, I wholeheartedly disagree...

#24 The portfolio is pretty bad *** according to your needs. There are a lot of really happy Blackberry users on this forum
Posted via CB10

[anon(3066922)]

I hope the Passport isnt priced for 'every hand'---price it for the correct hands....

This is correct! Thanks collinc93!

[dejanh]

This is correct! Thanks collinc93!

Define "correct hands" please.

Posted via CB10

[Mr4aces]

The first post was my ad-hoc reaction to the things I read in here, so yeah, it was long and unpolished.

The second one was the TLDR, if you want so

But yeah, it seems like some in here still haven't understood in what position BlackBerry is actually in.
They aren't a premium manufacturer anymore and they don't have the killer features to command a premium price.

So every single time I read things like "BlackBerry can't appear too cheap" or "Businesses have so much money to throw around, better milk them as much as you can", I am sitting in my armchair, and I wonder in which reality those great minds reside in...

Posted via CB10

Well said.

[ZeroBarrier]

BlackBerry might be shorting them selves on profit off a single device, but that doesn't matter much if most people who want it can't afford it.
For example.. 200$/1000 devices is the same as 100$/2000 devices

What do you think? Disagree?

If they could build devices for $0 then this would be true, but they can't; so this is flawed logic.

Posted via CB10

[anon(3066922)]

Define "correct hands" please.
Posted via CB10

Someone looking for screen size with QWERTY and Long battery life.

Those are really the only advantages over the Q10.

[anon(3066922)]

I have 3 products:

Product #1 is built cheap and has low end specs
It costs $249 to make, with 45% margin it sells for $452

Product #2 is built a little better and has medium specs
It costs $299 to make, with 45% margin it sells for $543

Product #3 is built better yet and has even better specs
Its costs $359 to make, with 45% margin it sells for $634

You may think that you should only pay for product #2 pricing for product #3 phone. Here lies the issue. If you pay $543 for the $634 phone it reduces the margin down to 36% margin which doesn't pay for cost of manufacturing, R&D, payroll etc.

Do we sell 1 million phones at 45% margin or 1.2 million phones at 36% margin? Or how about 3 million at 36%?
Scenario #1 - 85.5 million in gross profit
Scenario #2 - 32.8 million in gross profit
Scenario #3 - 82.0 million in gross profit

Get it? They could reduce pricing by 9% margin or sell for 543 vs. 634 and would have to sell 3 times more to make less than the same amount of money as selling 3 million phones.

[undone]

The Passport is either a shot in the dark or a purposely designed piece of hardware with clients already lined up...I am thinking the former of the two. Vs all the other stuff BB has done in recent devices...the I want to be like everyone else stuff (Z series)

[anon(3066922)]

The first post was my ad-hoc reaction to the things I read in here, so yeah, it was long and unpolished.

The second one was the TLDR, if you want so

But yeah, it seems like some in here still haven't understood in what position BlackBerry is actually in.
They aren't a premium manufacturer anymore and they don't have the killer features to command a premium price.

So every single time I read things like "BlackBerry can't appear too cheap" or "Businesses have so much money to throw around, better milk them as much as you can", I am sitting in my armchair, and I wonder in which reality those great minds reside in...

Posted via CB10

Not sure if I mentioned it in this forum but I see lots of businesses using iphone 5C's. There is nothing wrong with this nor should there be with businesses buying Z3, Q10, Z30 etc. But the ones that want the more expensive ones have to pay more money.

[dejanh]

I have 3 products:

Product #1 is built cheap and has low end specs
It costs $249 to make, with 45% margin it sells for $452

Product #2 is built a little better and has medium specs
It costs $299 to make, with 45% margin it sells for $543

Product #3 is built better yet and has even better specs
Its costs $359 to make, with 45% margin it sells for $634

You may think that you should only pay for product #2 pricing for product #3 phone. Here lies the issue. If you pay $543 for the $634 phone it reduces the margin down to 36% margin which doesn't pay for cost of manufacturing, R&D, payroll etc.

Do we sell 1 million phones at 45% margin or 1.2 million phones at 36% margin? Or how about 3 million at 36%?
Scenario #1 - 85.5 million in gross profit
Scenario #2 - 32.8 million in gross profit
Scenario #3 - 82.0 million in gross profit

Get it? They could reduce pricing by 9% margin or sell for 543 vs. 634 and would have to sell 3 times more to make less than the same amount of money as selling 3 million phones.

Aside from the fact that you are making a tremendous number of unqualified and unidentified assumptions, the math does not jive either. You start with one example and end up with something entirely different.

Also, one huge (incorrect) assumption you are making is that the cost of the device is composed of components and freight only. That's simply not the case.

Posted via CB10

[anon(3066922)]

Aside from the fact that you are making a tremendous number of unqualified and unidentified assumptions, the math does not jive either. You start with one example and end up with something entirely different.
Also, one huge (incorrect) assumption you are making is that the cost of the device is composed of components and freight only. That's simply not the case.
Posted via CB10

What do you mean. Margin calculations are easy. Let me know if you want the formula.

What are the "tremendous number of unqualified and unidentified assumptions"? It's an example. Using sample numbers. If you are looking to somehow align the sell price with actual pricing you are missing the point. I could have used an example of the cost of tooth brushes. The point is in order to recover lost profit due to margin drop you need to increase sales (a lot)

By dropping price, how much more do I need to sell? Margins need to be in the 40's period. This is not an assumption.

The math is simple and example is simple... re-read.

Gross margin is based solely off of cost of product vs. sell of product (not sure why you are mentioning freight)

[anon(3066922)]

Assumption you are making is that the cost of the device is composed of components and freight only. That's simply not the case.
Posted via CB10

Gross Margin needs to cover R&D, manufacturing costs etc. That was all part of the restructuring, realign operating expenses based on a foundation of sales at a particular margin. That is why CEO's get the big bucks. They need to make sure these numbers add up and balance.

[Cracklen]

"...or cheaply... it's about finding the right price."
IF priced cheaply and IF it runs marvelously . . . . it will blow-the-competition-out-tah-the-water imho !!

unless the majority of peoples really do believe $$$ is better than a $ price point on a quality product !!

imho


p.s. we don't pay $8+ instead of stocking up at $4 (or less, sale) on our fave toilet paper !

[anon(3066922)]

Aside from the fact that you are making a tremendous number of unqualified and unidentified assumptions, the math does not jive either. You start with one example and end up with something entirely different.
Also, one huge (incorrect) assumption you are making is that the cost of the device is composed of components and freight only. That's simply not the case.
Posted via CB10

This may help you better understand margin
http://pcic.merage.uci.edu/papers/20...ty_Oct2010.pdf

It is from 2010 when margins are higher but it is still relevant as an example

[bambinoitaliano]

Why aggressive consumer pricing on the passport may backfire:

Lets face it, the Passport isn't going to woo the Apple fanboyz away from their gadget-lust and it will not appeal to the masses upon masses of Android conformists. The days of competing in youth consumer markets are over for Blackberry.

Blackberry is marketing the passport to high end niche industries and corporate enterprise. Thus there is more value in establishing the PASSPORT's reputation as a real high tech business device. Its specs and uniqueness already give it an edge. Thus I believe that the corporatocracy would want a product which is recognized as a more expensive option compared to an i-phone. It seems unorthodox business thinking, but something tells me its the right move.

Thoughts? Am I wrong in thinking expensive, is better, from a branding standpoint?

With corporate clients, BlackBerry has the leverage of deep discount for the hardware in exchange for long term services. It will easily cover any losses for the company. Can't say the same with regular consumers, they are either subsidized by carriers or individuals pockets. There is no incentives in pricing at cost let alone taking a lost. Depends on what kind of numbers and interest were on their survey. Also what kind of sales they had projected on the consumer's front. I'll be surprise if Passport is price below $600 US.

[anon(3066922)]

Aside from the fact that you are making a tremendous number of unqualified and unidentified assumptions, the math does not jive either. You start with one example and end up with something entirely different.
Also, one huge (incorrect) assumption you are making is that the cost of the device is composed of components and freight only. That's simply not the case.
Posted via CB10

Notice increase in margin.
http://press.blackberry.com/content/...ss_Release.pdf

[bambinoitaliano]

But how do you maintain an ecosystem (it is important for enterprise as well) if you don't keep your volumes at a certain level. How do you keep your phone in carrier stores and websites (important for small and medium size businesses)?

Blackberry shouldn't worrying about hardware margins. They make their money on BES and other enterprise services. Get the dam phone into people's hand so that developers start to support the ecosystem. Do you really think selling a small handful of phones at high margins will have any impact on the company or its reputation? No. End of Story.

Both of your points are valid. BlackBerry just have to find the happy medium between the two. That's anyone guess at this point.

[bambinoitaliano]

With corporate clients, BlackBerry has the leverage of deep discount for the hardware in exchange for long term services. It will easily cover any losses for the company. Can't say the same with regular consumers, they are either subsidized by carriers or individuals pockets. There is no incentives in pricing at cost let alone taking a lost. Depends on what kind of numbers and interest were on their survey. Also what kind of sales they had projected on the consumer's front. I'll be surprise if Passport is price below $600 US.

P.S. given these days that no carriers are willing to stock up BlackBerry devices. I doubt the carriers will get much incentive to stock up BlackBerry this time around nor would they want to. Mostly order as per demand.

[anon(3066922)]

But how do you maintain an ecosystem (it is important for enterprise as well) if you don't keep your volumes at a certain level. How do you keep your phone in carrier stores and websites (important for small and medium size businesses)?
Blackberry shouldn't worrying about hardware margins. They make their money on BES and other enterprise services. Get the dam phone into people's hand so that developers start to support the ecosystem. Do you really think selling a small handful of phones at high margins will have any impact on the company or its reputation? No. End of Story.

I don't think that Blackberry makes nearly as much on BES as people think. They used to make 1 Billion a year on service revenue of which 700 million a year was for BIS customers. This all went away when they started shipping BB10. Add this to the lost BES customers and you are looking at probably 800 million a year of lost revenue. This was the biggest reason for blackberry's stock crash. That is a lot of money. Remember it was a service so 80-95% margin on that big number. Ouch.

[lnichols]

What do you mean. Margin calculations are easy. Let me know if you want the formula.

What are the "tremendous number of unqualified and unidentified assumptions"? It's an example. Using sample numbers. If you are looking to somehow align the sell price with actual pricing you are missing the point. I could have used an example of the cost of tooth brushes. The point is in order to recover lost profit due to margin drop you need to increase sales (a lot)

By dropping price, how much more do I need to sell? Margins need to be in the 40's period. This is not an assumption.

The math is simple and example is simple... re-read.

Gross margin is based solely off of cost of product vs. sell of product (not sure why you are mentioning freight)

And if you price it too high, you may not move but a very limited number of devices, while making more (you have to make a certain number to make the production feasible), possibly causing you to have to sell them substantially lower and writing down inventory.

Posted with a BlackBerry Z10

[anon(3066922)]

And if you price it too high, you may not move but a very limited number of devices, while making more (you have to make a certain number to make the production feasible), possibly causing you to have to sell them substantially lower and writing down inventory.

Posted with a BlackBerry Z10

Yes that is correct but best they figure out their target price before they design it. You are right though. They will never know until after they launch how it will go.

Posted via CB10

[insandouts]

The phone not built for consumers. It is a vertical market phone. Best to buy the Z3. I hear it is priced great for the value

Why are they having a public event on the 24th if the phone is not for consumers?
Never heard of a company that sells to Enterprise customers having public events