[crucial bbq]

I am not a BlackBerry analyst nor do I have inside information. I am just someone who connected the dots, and yes, I realize that I could be wrong. Bear with me here;

Thor came up through BlackBerry ranks via their handset division. He landed the position of CEO in January 2012, went from being one of Canada's best CEOs to worst, and then was quickly fired in November of 2013. One thing is for certain about Thor: he truly seemed enthusiastic about BB10 and seems to be the only CEO at BlackBerry to actually try to make things happen with BB10.

Chen came on board, both as executive chair of the board and as interim CEO. Obviously he became CEO shortly thereafter. Many people around here seem to think of Chen as some sort of joke but the dude is not stupid. In fact, he is member to many presitigous organizations, often times being the top dog of said organizations. He is a member of two that deal with U.S.- China relations (one being for the U.S. Government that largely focuses on trade) and is considered to be a "master of Silicon Valley".

In December of 2013 BlackBerry already had a deal with Foxconn and Chen cancelled two low-end BB10s. He did move forward with two other devices, however, of course being the Passport and Classic. Also in December of 2013 Chen said that BlackBerry was only going to focus on high-end handsets for enterprise and that these handsets will only see limited number runs.

In January of 2014 we get BB10 10.2.1. What is significant about this is 10.2.1s added security features via BES12 and of course, the official announcement/acknowledgement of ART. ART is significant here because it marks the transition to non-ported Android apps on BB10 and the enhanced security through BES12 is one hallmark of the Priv.

In February of 2014 rumors of a 64-bit octocore "goliath" begin to emerge and right along with it commentary that this phone will run Android. It was also rumored that this phone would to be released in September of 2014 but we all know that did not happen.

Throughout 2014 layoffs are massive at BlackBerry, which continued into 2015 and BlackBerry losing some of its best talent.

Speaking of layoffs, the BerryLeaks team rather mysteriously disbanded. They cited internal conflict but I dunno, maybe they saw the writing on the wall? Maybe they were [former] BlackBerry employees?

2014 was a relatively quiet year in terms of handsets but there was the rumored Z50. Instead of the Z50 we got the Z3, a severe downgrade.

By the end of 2014 BlackBerry had cemented its partnership with Samsung, which publicly was reported to be about Knox/BES12.

In January 2015 we got the BB10 10.3.1 update and what is most significant about this release is the addition of the Amazon App store, which of course was the first official channel to download Android apps. Also in 2015 we saw rumors for the Rio, Ontario, and Venice which of course became the Leap, Passport SE, and Priv. The Leap is once again a downgrade of the "Z" line, the SE is only just a Passport with a new chassis, and the Priv being the only truly innovative and new handset.

Now, of course in March of 2015 we were teased with the blurry pic of the "slider" from MWC and with it the rumors of it being an Android phone continued. Still no Z50.

Throughout all of this developer relations worsened, BlackBerry World worsened, and so on.

Also in March of 2015 Chen was guest at the Waterloo Chamber of Congress meeting. In it he said that the hardest part about turnarounds is changing the culture of the company. He went on to say that the culture at BlackBerry was one of handsets and that many could not, or would not, accept BlackBerry as anything but. It is possible that many who left were simply not cool with the idea of taking BlackBerry to Android.

In a late September 2015 Inside BlackBerry blog post, where Chen discusses the move to Android, he states point blank that what BlackBerry has been doing over the last two years was the specific lead up to what became the Priv. In this same post he said that the BB10 "workhorses" Passport and Classic will not be going away however he does not specifically mention what OS these phones will run in the future, simply alluding to their form factor sticking around. The only other rumored BlackBerry handset at this point in time is the Android version of the Passport.

Also in 2015 Chen has repeatedly said that he would not leave the handset business despite being advised to do so, every other word out of his mouth has been "cross-platfrom", and he seems reluctant to talk about the future of BB10. And then of course the partnership with Google .

There you have it. It does seem as if Chen has been warming us up to the idea of an Android BlackBerry future since late 2013. But why Android? My guess is that the initial plan was to simply fork their own version of Android, which makes sense with their deal with Amazon. It is impossible to tell exactly when Google came into all of this but my guess is that it has something to do with the Open Automotive Alliance, which as you may infer, is the OHA version but for auto OS. You may also recall the auto OS is one frontier that Chen wants to dominate and some of the OAA members already run QNX. However BlackBerry is still not listed as joining either the OHA or the OAA, but who knows.

Another reason for Android on BlackBerry is that Chen is rather tech-savy himself and he is intimately familiar with the markets in both the U.S., China, and obviously Canada. He knows that Android is going to continue to dominate the Asian market that there are 100s of millions of untapped potential sales (and of course I do not mean all for BlackBerry, just in general). This market is currently dominated by the cheap handsets made by ZTE, Huawei, Kyocera, and a few others but Apple is picking up pace in some sectors. Chen is looking to get into this market and it would not happen with BB10, but with a BlackBerry phone running Android "made by a Chinese man" might be enough to lure those with the cash away from the iPhone.

To add: tech bloggers have been saying that BlackBerry should join the OHA all the back beginning in 2009 and CrackBerry godfather himself Kevin even wrote "11 Reasons why Google Should Aquire BlackBerry" back in 2011. It is archived here on CrackBerry. As we know Kevin left for another position at Mobile Nations. Perhaps one reason for doing so was that he, too, saw the writing on the wall. Even Bla1ze is not phased by "no more BB10s".

I have a few other items in mind here but this is good enough for now and I have other things to do at the moment. Just curious what others think.

[thurask]

Speaking of layoffs, the BerryLeaks team rather mysteriously disbanded. They cited internal conflict but I dunno, maybe they saw the writing on the wall? Maybe they were [former] BlackBerry employees?

Posted via CB10

[JeepBB]

No, I don't think Android was ever the plan. Saving BlackBerry (the company) was the plan.

The plan was:
Announce that BB was now an Enterprise Software & Services company (check),
Reduce the cost base of the company by firing employees and selling the buildings and estate (check)
Kill BB10, which has cost BB billions and almost killed the company. (check)
Close Hardware down (che... ah, wait... need money, fast!)

If software and services revenues had grown as fast as Chen had hoped, that would have been it for BB10 and the Hardware division. Unfortunately, the software growth has been sluggish, and BB needs hardware to cover.

The Priv is the stop-gap revenue filler. It was a BB10 slider just a few months ago, and IMO would never have seen the light of day if Chen didn't need it now. Instead it has been rapidly re-spun as an Android handset to get that much needed revenue and try to plug the 40% revenue hole currently filled by hardware.

So, no. Android was never the plan. It's just an opportunistic throw of the dice to gain Chen enough time & money to complete the transition to software.

[stevobbm]

If the priv is successful, then it might just be the plan.

Via Passport 

[crucial bbq]

No, I don't think Android was ever the plan. Saving BlackBerry (the company) was the plan.

The plan was:
Announce that BB was now an Enterprise Software & Services company (check),
Reduce the cost base of the company by firing employees and selling the buildings and estate (check)
Kill BB10, which has cost BB billions and almost killed the company. (check)
Close Hardware down (che... ah, wait... need money, fast!)

If software and services revenues had grown as fast as Chen had hoped, that would have been it for BB10 and the Hardware division. Unfortunately, the software growth has been sluggish, and BB needs hardware to cover.

The Priv is the stop-gap revenue filler. It was a BB10 slider just a few months ago, and IMO would never have seen the light of day if Chen didn't need it now. Instead it has been rapidly re-spun as an Android handset to get that much needed revenue and try to plug the 40% revenue hole currently filled by hardware.

So, no. Android was never the plan. It's just an opportunistic throw of the dice to gain Chen enough time & money to complete the transition to software.

If the plan was to close hardware down completely it would have went out with Heins. Chen has no need to prove that BB10 cannot sell, Thor proved that himself. Perhaps there were some contractual agreements over the Passport and Classic but then why the Leap, SE, and Priv? Chen could have just kept the handful of staff necessary to fulfill the remaining agreements and be done with it. Wall St. analysts believe that BlackBerry would be valued higher if they completely left handsets and Chen himself stated they would be better off financially if they pulled out of hardware but here Chen is, still chugging along with BlackBerry phones.

Maybe Chen is devaluing stock on purpose? Perhaps, but that is highly illegal and I am certain Chen does not want to spend time in prison. Nor does the Board.

Maybe Chen just wants to use the Priv to prove that Android handsets can work well on BES12. Okay, sure. But that is one expensive proposition just to prove a point and if this were the case then why not just do it with Knox/Samsung? Because BlackBerry got a little something extra from that partnership, that is why.

Digging deeper into the hole only makes sense if they were also building the ladder to climb out of it at the same time.

The Priv may be the band-aid to stop the "handset division" from bleeding but my point being Chen could have just cauterized the wound two years ago and have been done with it. Financially, they would be in a better position now had that happened. But, that is not what happened. Chen partnered with Samsung, Amazon, and Google. Chen is bringing us the Priv. Chen is bringing "BlackBerry" to Android.

For an opportunistic roll of the dice the events leading up to the Priv sure do seem suspicious. Look, I am not a fan of Android and am up in the air over what to do about my next handset. I am still leaning heavily towards a Passport or even Classic right now and consider myself amongst the BB10 diehards. If you look through my posting history you will see that I was one of those who badmouthed Android and claimed to would leave BlackBerry if they went Android. This was all a hard pill for me to swallow. If I had the same attitude about all of this now as I had only two months ago I would be writing a similar post to yours above.

Hell, even I was saying that the Priv began life as a BB10 handset not that long ago...

[anon(2313227)]

Based on his fumbling with Android(Priv). Do you really think he was ever an Android user?
More likely an Apple user than the Google.

He liked BB10 he uses a Passport. Hence the crappy demo.

[crucial bbq]

Based on his fumbling with Android(Priv). Do you really think he was ever an Android user?
More likely an Apple user than the Google.

He liked BB10 he uses a Passport. Hence the crappy demo.

Perhaps you are right. Then again what phone would he be seen with? Obviously a BB10 device, no?

Maybe he was drunk? He did refer to the OS as "the Googles" or something like that. Maybe hypoglycemic? Maybe just uncoordinated in general? All we know is that he goofed the impromptu demo, not why.

[anon(2313227)]

He was clearly swiping up trying to wake it up.. and was not used to the home button.
But yes he has been using BB10 for the last 1.5 years. BB10 is pretty awesome that way.
Make you pick up another device(IOS and Android) and go WTF is wrong with this UI.

[crucial bbq]

Oh, I know. I still do it from time to time on my iPad and I've had iPads since before BB10. And yes, I know BB10 is awesome and do wish for a BB10 version of the Priv.

The idea behind my OP we formulated over the summer, BTW, and further furled by some of Chen's more recent comments.

Posted via CB10

[kvndoom]

Two things I'm sure of (even without having proof or insider information):

1- the slider was originally going to be BB10

2- the decision to go android was NOT an easy one

It's impossible to make everybody happy. That's why every Tom **** and Harry off the street isn't upper management. Most of the mouths on here saying "I could do better" wouldn't last a week.

The top shareholders want the company to survive and profit, long term. They no more care about what anonymous people on crackberry want than they care about the thousands of thousands of laid off employees who can't feed their families any longer. That's business, and it's cold and cruel sometimes.

Deciding to ditch an OS that you've already pumped several years and billions of dollars into is not something done on a whim. But choosing to keep it and continue bleeding money until eventual bankruptcy is still not a better choice.

Posted from BlackBerry Classic, T-Mobile, no camera, 10.3.2.2514

[JeepBB]

If the plan was to close hardware down completely it would have went out with Heins. Chen has no need to prove that BB10 cannot sell, Thor proved that himself. Perhaps there were some contractual agreements over the Passport and Classic but then why the Leap, SE, and Priv?

No, again.

BB needs Hardware. Thor definitely needed it - hardware revenue was huge part of BB's income during Thor's time, and it still amounts to over 40% of revenue for Chen. If hardware is closed, by Chen, today, BB (the company) likely won't be able to cover.

The Passport, Leap, Classic were intended to keep the money coming in until the software transition is complete. I'm sure it is a huge disappointment to Chen that software isn't growing as fast as hoped.

So, given that Chen still needs hardware revenue, and that the sales trends for BB10 devices fall to zero in 9 months... what's a poor CEO to do?

Answer: burning platform. Announce your new Android handset to a disbelieving world whilst muttering platitudes about not having abandoned your security roots.

I suspect that BB10 sales will now fall off a cliff as a result of this - who would buy a phone running an OS that is clearly headed for the graveyard except for the uber-fans? And, as the sales figures show, there aren't enough of them anymore! Chen probably figures (hopes?) that the loss of BB10 sales is compensated for by increasing Priv sales. At worst, he's brought the "zero BB10 sales outcome" forward by a quarter - no great loss if the Priv succeeds!

I do however agree with you that Android development has been going on for many months. Bla1ze posted a while back that Android Passports etc have been circulating inside BB for almost a year now... but I reckon Chen hoped that it was a card he'd never have to play. He's a smart cookie Chen, he made sure he gave himself options, but Android was never Plan A.

Personally, I dislike Android... though I really like the slider concept (me: big Torch fan ). So, the Priv isn't for me, and certainly won't become a speculative buy for me on a whim at that price!

I am however interested in whether Chen can pull this off and save BlackBerry... though of course, the BlackBerry he saves will ultimately be of little interest to anyone who isn't an IT manager, or stockholder, as BB becomes an Enterprise Software and Services company.

[rsrocha]

The cross platform Chen is talking about is not about the software. It is the hardware! Blackberry already has phones prepared for the nearest future: the passport, classic and Leap with android. The hardware is already capable they just need to change the software.

The passport was/is a phone that many people would buy if it was android.

Chen stated that the real challenge was to secure android by blackberry standards and they did it with the Priv.

So Yes he had this already planned and in the mean time we have the Priv to test android with blackberry name on top. If it is well accepted then they just need to load their android version to the passport, leap and classic. AND if they really care about their loyal costumers, maybe an android update to the Q10, Z10, Z30 because the hardware is almost the same.

Posted via CB10

[MO3iusONE]

I'll just say this, John Cena has a good track record and turning companies around. I think they brought John Cena on board to turn the company around.

I hope the Priv does well, I hope blackberry continues to make phones.

[aha]

He inherited a tarnished reputation, a billion dollar inventory write-off worthy, a team failed on almost every project in the past 6-7 years, a rapidly declining income stream from service fees, an outdated, incompetent but sometimes still arrogant mindset/corporate culture... if you consider that, I think he has done pretty well in these two years.

He did give time for BlackBerry 10 to grow... tried solving app problem with Android runtime, which did work for me. tried the luck in the low cost device market, which I was disappointed from the beginning. He tried to get OS7 users to upgrade or come back... no, those diehard keyboard fans and spec-don't-matter crowd are just too small to support 10 millions sales target.

He could have tried Z50... I don't mind... but he can't just sit there trying every angle and tweak every variable to make BB10 work while ignoring the big open Android opportunity, so that's why he went with Priv.

The way I see these dots, OP, they don't connect like the way you described. I think he has given reasonable effort to make BB10 work... if I do it I probably have tried Z50 first before Classic, or even before the odd ball Passport... I wouldn't even try low cost devices... but he is new at this and surrounded by outdated executives who still remembers the success of Curve line. Beside, before that it was Z30, Z5, Leap.... it looks like they have tested the all touch market... except that they tested it wrong. The failures of Z5, Z30, and Leap were not the evidence of no demand for all touch BB10 device, but the failure of not providing high end high spec'ed all touch devices.

But I digress. Those dots only show how Chen was trying to make it work in the ways his people was telling him... he tried (misled by those dinosaurs) for BB10, now he is saying enough is enough, let's try something else.

Let the man do the job. He has proven himself so many times now, and you think he should listen to us?

PassportSQW100-1/10.3.2.2639

[cgk]

Without getting into all the things you raise - from everything I read (and its not a market I general do work on - so happy to be corrected), Android in China is a problem because most (majority) aren't Android, they are AOSP variations or other IP infringing versions. That might change in the future but in the time in which Priv has to be successful it's not a factor either way. Priv will

As for the timeline - I'm not sure he was giving a brief to kill BB10 but to make BBRY profitable and increase margins - so Its no clear to us how behind the final BB10 devices he was. Its pretty clear now however whatever chances he was willing to take with BB10 that has now ended. The Priv it is pretty clear was hardware for BB10.

The cross platform Chen is talking about is not about the software. It is the hardware! Blackberry already has phones prepared for the nearest future: the passport, classic and Leap with android. The hardware is already capable they just need to change the software.

It would not be launched before 2016 - you might be able to sell a leap with android for $50.. maybe.

[rsrocha]

The Leap is fairly recent as the Classic. And the hardware is almost the same as the Q10.

But as Chen said they are targetting to high end s� it more possible that the only BB10 phone to be upgraded to android is the passport.

Posted via CB10

[thurask]

I'll just say this, John Cena has a good track record and turning companies around. I think they brought John Cena on board to turn the company around.

I hope the Priv does well, I hope blackberry continues to make phones.

🎺🎺🎺🎺

Posted via CB10

[dejanh]

Yes, I read the whole thing. I like your write-up. There is definitely some merit in what you are saying, and I can see how the "story" progresses. It would not be surprising if BlackBerry 10 was intended to die a while ago. The transition had/has to happen slowly though because there are customers critical to BlackBerry that bought into that ecosystem. Now they have to be slowly pulled out of it, and what better way than to demonstrate that you can do a secure device with Android (notwithstanding it being the only choice).

Well written piece.

[Mirk]

Honestly, I've been thinking Android was Prem Watsa's plan all along...

[6stringriffs]

Correct me if I'm wrong, he's only been in charge for 2 years right? And in that 2 years he got his people to develop, code, and test software that will go into an android device. Not just the Priv, but all the Enterprise software and systems that will be used to serve ALL platforms. That is pretty much how long these projects take especially if you are starting from zero, as opposed to a Samsung who has a history of making Android devices and they only have to launch a project to make an S7 Edge or Note 6 for example. Projects like that cannot be done in 1 year let alone 6 months.

I believe that was his plan all along when he was brought in. 2 years is not an exaggeration that this was very aggressive schedule. Probably lots of weekends and overtime for a lot of workers.

[cgk]

The Leap is fairly recent as the Classic. And the hardware is almost the same as the Q10.

But as Chen said they are targetting to high end s� it more possible that the only BB10 phone to be upgraded to android is the passport.

Posted via CB10

It might have been released recently but the process is ancient in it - its part of that big batch of snapdragon S4 processor that bbry seem to have a life time contract to use - it would be three (four?) Years old in 2016.

[Techno-guy]

Interesting analysis OP. That said, I think Chen gave it his best shot with BB10 but at this point, with sales down to 800,000 per quarter and plummeting very quickly (and at an Average Selling Price of a measly $240), he saw the writing on the wall and decided to convert the Priv from a BB10 developed device to Android.

I think Android is nothing more than a half-hearted shot in the dark to see if anything sticks (thus no Launch Event, no full carrier support Day 1, no real company enthusiasm for the phone). My senses tell me that with Chen's heart not truly in it, he's prepared to shut down hardware a year from now (or sooner) after Priv sales disappoint in a dramatic fashion which is bound to happen at this point.

I guess we'll all know the the truth when Losing the Signal part II is published! It will be a fascinating read!

[Jeroen Vos]

I think they should make it possible for every Priv owner to install BB10 later on to try. Sort of a custom ROM kinda option. Maybe that will get some souls for BB10. Realistically I think BB10 is heading PlayBook OS...

Posted via CB10

[miketko]

The Leap is fairly recent as the Classic. And the hardware is almost the same as the Q10.

But as Chen said they are targetting to high end s� it more possible that the only BB10 phone to be upgraded to android is the passport.

Posted via CB10

If so I'd be tempted to grab a silver addition. I honestly don't see a huge update like that happening.

[DaSchwantz]

Chen just looked at the numbers and realized he could break even by adding Android hardware much easier than relying solely on bb10 hardware. He's transparent about this to a fault.

Posted via CB10