10-19-15 07:16 AM
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  1. lawguyman's Avatar
    It may get 40% of it's revenue, but they are losing money on them. This is also why Chen is doing this strategy and can't just cut and run. He has to do a controlled failure to accomplish what he wants. In two years, BlackBerry will no longer be making hardware.
    You're over-thinking this. CEOs don't set out to launch "controlled failures."

    Companies are in business to make money. If BlackBerry wanted to shift solely to making Android software for other phones, it would just do that. Priv isn't necessary.

    Posted via CB10
    ubizmo likes this.
    10-17-15 09:24 AM
  2. A_Aviator_A's Avatar
    Thanks for posting that. My take after reading it is that the supplier assumes some of the costs of inventory (hence the risk of prolonged storage costs if the units do not sell) and as an exchange gets all the servicing contracts on the devices. I do not think however that the supplier is stuck with the bill if the phones do not sell. Furthermore this business model is for low-cost devices in emerging markets which I doubt the PRIV is set for. I still believe that BB is responsible for the supply costs of their devices.
    Troy Tiscareno and dolco like this.
    10-17-15 09:24 AM
  3. A_Aviator_A's Avatar
    I don't know if you know it, but 22 weeks it's almost half an year. So you want to sell 5million in 1 year, you only make 500k for the first half, then you expect to sell 4.5 million for the rest of the year when the phone isn't novelty anymore.

    I don't buy this rumour.
    I'm not saying its true, I'm just saying that it makes sense to me given BB's hardware performances of the past.
    10-17-15 09:29 AM
  4. Joao Oliveira's Avatar
    I'm not saying its true, I'm just saying that it makes sense to me given BB's hardware performances of the past.
    It makes sense to be carefull with the manufactured inventory for sure, but not with the numbers that the leak reports. 500k for the first 22 just doesn't make sense, has to be much higher. Even the Passport that was a much more niche device didn't have those low numbers, they were stocking it back almost every week
    10-17-15 09:34 AM
  5. AnimalPak200's Avatar
    Yeah, I don't think Chen is purposely setting the Priv up for failure.

    In fact, they are risking a bit of the credibility of their software and security businesses by drumming up the Priv.

    Look at the latest post by David Kleidermacher, their supposedly renown security guru.

    http://blogs.blackberry.com/2015/10/...droid-privacy/

    If they thought the Priv was just a half-a$$ pretend attempt to validate exiting the hardware and focusing on software and security, there is NO WAY they would so directly associate those units' capabilities with the hardware. As it is, if the Priv fails or is very vulnerable, it will drag down or at least tarnish those business units as well.

    Who knows about that low order number. Could be the 'unlocked sold directly by BlackBerry' order, excluding carrier commitments.

    Posted via CB10
    10-17-15 09:37 AM
  6. Bluenoser63's Avatar
    Yeah, I don't think Chen is purposely setting the Priv up for failure.

    In fact, they are risking a bit of the credibility of their software and security businesses by drumming up the Priv.

    Look at the latest post by David Kleidermacher, their supposedly renown security guru.

    How PRIV Sets the Bar for Android Privacy | Inside BlackBerry

    If they thought the Priv was just a half-a$$ pretend attempt to validate exiting the hardware and focusing on software and security, there is NO WAY they would so directly associate those units' capabilities with the hardware. As it is, if the Priv fails or is very vulnerable, it will drag down or at least tarnish those business units as well.

    Who knows about that low order number. Could be the 'unlocked sold directly by BlackBerry' order, excluding carrier commitments.

    Posted via CB10
    He works for BlackBerry and isn't impartial and he is disagreeing with his CEO who says it is the same as KNOX in terms of security.
    10-17-15 09:39 AM
  7. lawguyman's Avatar
    Thanks for posting that. My take after reading it is that the supplier assumes some of the costs of inventory (hence the risk of prolonged storage costs if the units do not sell) and as an exchange gets all the servicing contracts on the devices. I do not think however that the supplier is stuck with the bill if the phones do not sell. Furthermore this business model is for low-cost devices in emerging markets which I doubt the PRIV is set for. I still believe that BB is responsible for the supply costs of their devices.
    BlackBerry has since cut other deals with suppliers like Wistron.

    Chen has repeatedly said that inventory risk has shifted to the manufacturers under these deals but exactly how the deals work has not been disclosed.

    These were fueled by the billion dollar Playbook and Z10 writedowns.

    I think that the only way that the deals could work is if the manufacturer, not BlackBerry, decides how many to build.

    Posted via CB10
    Troy Tiscareno and Mecca EL like this.
    10-17-15 09:39 AM
  8. Bluenoser63's Avatar
    You're over-thinking this. CEOs don't set out to launch "controlled failures."

    Companies are in business to make money. If BlackBerry wanted to shift solely to making Android software for other phones, it would just do that. Priv isn't necessary.

    Posted via CB10
    He thinks he can make money by dumping what is losing him money. The hardware.
    10-17-15 09:40 AM
  9. early2bed's Avatar
    I don't know if you know it, but 22 weeks it's almost half an year. So you want to sell 5million in 1 year, you only make 500k for the first half, then you expect to sell 4.5 million for the rest of the year when the phone isn't novelty anymore.

    I don't buy this rumour.
    The initial run of the Priv will make up 10% of his smartphone sales during the first six months of its existence. Given that the company still relies on a long tail of legacy smartphone sales in many countries, this is probably what he expects. The core BlackBerry users is still probably an enterprise customer that buys a Classic-like device for employees that just want a hardware keyboard. Do you really expect most BlackBerry users to jump into a sliding slab? These users have been shunning slabs for years, now.

    As for 22 weeks, given the number of components that have to be ordered and the likelihood of exclusives in most markets, this is pretty realistic. You just can't pick up the phone and order more smartphones for delivery in 60 days. These factories are busy making components for successful smartphones by companies that dominate the market. Most of these factories were built specifically to build a single line of devices that sell in the tens of millions each quarter. They aren't waiting around for BlackBerry to decide how many they want. A single supplier that delays a single component means no handset.

    How do you think Thor ended up with almost a billion dollars worth of extra smartphones? Because he can't count? By the time they realized that they had overestimated sales volume, they probably had 22 weeks of handsets already ordered. Think about it - he made a billion dollars worth of extra phones. What's that - 4 million extra phones?
    10-17-15 09:40 AM
  10. Joao Oliveira's Avatar
    Yeah, I don't think Chen is purposely setting the Priv up for failure.

    In fact, they are risking a bit of the credibility of their software and security businesses by drumming up the Priv.

    Look at the latest post by David Kleidermacher, their supposedly renown security guru.

    How PRIV Sets the Bar for Android Privacy | Inside BlackBerry

    If they thought the Priv was just a half-a$$ pretend attempt to validate exiting the hardware and focusing on software and security, there is NO WAY they would so directly associate those units' capabilities with the hardware. As it is, if the Priv fails or is very vulnerable, it will drag down or at least tarnish those business units as well.

    Who knows about that low order number. Could be the 'unlocked sold directly by BlackBerry' order, excluding carrier commitments.

    Posted via CB10
    On point!
    10-17-15 09:41 AM
  11. Joao Oliveira's Avatar
    The initial run of the Priv will make up 10% of his smartphone sales during the first six months of its existence. Given that the company still relies on a long tail of legacy smartphone sales in many countries, this is probably what he expects. The core BlackBerry users is still probably an enterprise customer that buys a Classic-like device for employees that just want a hardware keyboard. Do you really expect most BlackBerry users to jump into a sliding slab? These users have been shunning slabs for years, now.

    As for 22 weeks, given the number of components that have to be ordered and the likelihood of exclusives in most markets, this is pretty realistic. You just can't pick up the phone and order more smartphones for delivery in 60 days. These factories are busy making components for successful smartphones by companies that dominate the market. Most of these factories were built specifically to build a single line of devices that sell in the tens of millions each quarter. They aren't waiting around for BlackBerry to decide how many they want. A single supplier that delays a single component means no handset.

    How do you think Thor ended up with almost a billion dollars worth of extra smartphones? Because he can't count? By the time they realized that they had overestimated sales volume, they probably had 22 weeks of handsets already ordered. Think about it - he made a billion dollars worth of extra phones. What's that - 4 million extra phones?
    No manufacturer needs 22 weeks to build a phone, Period... The Passport was much more of a niche device that the Priv is, and it didn't need months to have inventory again, let alone 22 weeks... that's 5 months!!!
    wincyUt likes this.
    10-17-15 09:43 AM
  12. anon(679606)'s Avatar
    Maybe maker insisted on delivering the big closet full of unglued unshipped passports & such to squeeze a check out'a BlackBerry before the Priv goes out the door...
    10-17-15 09:44 AM
  13. dejanh's Avatar
    Lol @ Reddit and this post. While stock-outs are possible with tight inventory control, you're not looking at more than 2-4 week lead time at worst.
    10-17-15 09:45 AM
  14. lawguyman's Avatar
    He thinks he can make money by dumping what is losing him money. The hardware.
    If that was true, he wouldn't make Priv at all. Why lose more money to stop losing money. It's not even logical.

    Posted via CB10
    DolemiteDONS likes this.
    10-17-15 09:46 AM
  15. donnation's Avatar
    It must be true since it was posted on Reddit....
    dejanh likes this.
    10-17-15 09:52 AM
  16. AnimalPak200's Avatar
    He works for BlackBerry and isn't impartial and he is disagreeing with his CEO who says it is the same as KNOX in terms of security.
    Lol, of course. That was not my point at all.

    My point was that, if they really wanted to ditch the hardware business so they could focus on software and security, they wouldn't have the guy in charge of software security state on record that they will be integral to the Priv's security. Now that he has basically done that with the aforementioned blog post, if the Priv does fail, it will drag down their software and security businesses as well.


    Posted via CB10
    wincyUt likes this.
    10-17-15 09:53 AM
  17. Iggy City's Avatar
    Fire Chen! Bring out the pitchforks!
    10-17-15 09:53 AM
  18. tmf06's Avatar
    Yeah, I don't think Chen is purposely setting the Priv up for failure.

    In fact, they are risking a bit of the credibility of their software and security businesses by drumming up the Priv.

    Look at the latest post by David Kleidermacher, their supposedly renown security guru.

    http://blogs.blackberry.com/2015/10/...droid-privacy/

    If they thought the Priv was just a half-a$$ pretend attempt to validate exiting the hardware and focusing on software and security, there is NO WAY they would so directly associate those units' capabilities with the hardware. As it is, if the Priv fails or is very vulnerable, it will drag down or at least tarnish those business units as well.

    Who knows about that low order number. Could be the 'unlocked sold directly by BlackBerry' order, excluding carrier commitments.

    Posted via CB10
    Thanks for posting. I may have missed it, but that was the first confirmation I have seen that picture password will be on the Priv.

    Posted via CB10
    00stryder likes this.
    10-17-15 10:00 AM
  19. Bluenoser63's Avatar
    If that was true, he wouldn't make Priv at all. Why lose more money to stop losing money. It's not even logical.

    Posted via CB10
    They would lose more money as they are not yet ready on the software side to complete as a software only company. They have to support what they have an look like they are trying. Google the "Osborne Effect", they are not ready to be a software only company and have to transition to that model even if it means they are releasing phones that they don't want to.
    A_Aviator_A likes this.
    10-17-15 10:00 AM
  20. dejanh's Avatar
    Fire Chen! Bring out the pitchforks!
    Don't forget BlackBerry 10 4 Life! Android sucks, etc.

    They would lose more money as they are not yet ready on the software side to complete as a software only company. They have to support what they have an look like they are trying. Google the "Osborne Effect", they are not ready to be a software only company and have to transition to that model even if it means they are releasing phones that they don't want to.
    Wow, okay. Explain this to me then...say PRIV demand turns out to be strong. BlackBerry stocks-out fast. What will be Chen's excuse to the board for not being able to deliver on strong demand? What is he going to say "oops, I didn't realize it will sell" or "the supply chain director did it". Seriously, I'm grasping at straws here even trying to come up with a remotely feasible scenario where anything that you have said to date in this thread makes any sense. If they were dumping more BlackBerry 10 devices in the market maybe, just maybe there would be a semblance of "sense" in your argument. As it stands, well, you don't have a leg to stand on.
    DolemiteDONS and wincyUt like this.
    10-17-15 10:08 AM
  21. lawguyman's Avatar
    They would lose more money as they are not yet ready on the software side to complete as a software only company. They have to support what they have an look like they are trying. Google the "Osborne Effect", they are not ready to be a software only company and have to transition to that model even if it means they are releasing phones that they don't want to.
    I read about the Osbourne Effect and that is not what you are describing at all.

    If BlackBerry wanted to go software only, it could shut down or nurse BB10 as it is and launch when they are ready. Priv isn't necessary to do this.

    Again, what you are saying isn't even logical.

    BlackBerry is trying to make money on Priv. IF it doesn't, for sure, hardware is done and gone. But, Priv isn't being set up to fail.

    Posted via CB10
    10-17-15 10:11 AM
  22. conite's Avatar
    When Chen came to BlackBerry, everyone there knew BB10 was done, and it was just a matter of time. Software was going to be the future, but it was nowhere near being ready.

    Similar to Bluenoser's argument, I actually believe that Chen was just stalling by half-heartedly releasing BB10 devices to stay relevant, slowly buying time for the software unit.

    But I think the Priv is different. I see no logical reason why Chen or BlackBerry would deliberately try to tank it. There is simply too much potential upside to ignore. The board would have his head.

    PassportSQW100-4/10.3.2.2789
    Mr4aces, LazyEvul and 00stryder like this.
    10-17-15 10:17 AM
  23. dejanh's Avatar
    When Chen came to BlackBerry, everyone there knew BB10 was done, and it was just a matter of time. Software was going to be the future, but it was nowhere near being ready.

    Similar to Bluenoser's argument, I actually believe that Chen was just stalling by half-heartedly releasing BB10 devices to stay relevant, slowly buying time for the software unit.

    But I think the Priv is different. I see no logical reason why Chen or BlackBerry would deliberately try to tank it. There is simply too much potential upside to ignore. The board would have his head.

    PassportSQW100-4/10.3.2.2789
    Precisely. This made some sense while milking BlackBerry 10. It makes no sense at all with the PRIV.
    10-17-15 10:25 AM
  24. lawguyman's Avatar
    When Chen came to BlackBerry, everyone there knew BB10 was done, and it was just a matter of time. Software was going to be the future, but it was nowhere near being ready.

    Similar to Bluenoser's argument, I actually believe that Chen was just stalling by half-heartedly releasing BB10 devices to stay relevant, slowly buying time for the software unit.

    But I think the Priv is different. I see no logical reason why Chen or BlackBerry would deliberately try to tank it. There is simply too much potential upside to ignore. The board would have his head.

    PassportSQW100-4/10.3.2.2789
    No. Chen actually has been pursuing a two fold devices strategy for a long time.

    With BB10, he thought he could make money by focusing solely on enterprise. He actually sunk money into developing new devices (Classic and Leap). It turns out that he wasn't able to sell those devices in the volumes he wanted.

    At the same time he was working on Android. It takes around 18 months to develop a new phone and probably more if, like BlackBerry you are trying do do something a little bit different. So, Priv has been in the works for a long time.

    It was Chen's idea from close to the start of his tenure to pivot toward Android. If you look back at things he said a long time ago, it is clear that Android was in the works.

    If he wanted to kill devices he would have done what HP did with WebOs. Just shut it down and hold a firesale. This way, you put it in your rear view mirror quickly. Instead, devices issues have haunted Chen since he took over. Clearly, he thinks he can make money with devices but this is his last try.



    Posted via CB10
    dejanh and 00stryder like this.
    10-17-15 10:32 AM
  25. conite's Avatar
    No. Chen actually has been pursuing a two fold devices strategy for a long time.

    With BB10, he thought he could make money by focusing solely on enterprise. He actually sunk money into developing new devices (Classic and Leap). It turns out that he wasn't able to sell those devices in the volumes he wanted.

    At the same time he was working on Android. It takes around 18 months to develop a new phone and probably more if, like BlackBerry you are trying do do something a little bit different. So, Priv has been in the works for a long time.

    It was Chen's idea from close to the start of his tenure to pivot toward Android. If you look back at things he said a long time ago, it is clear that Android was in the works.

    If he wanted to kill devices he would have done what HP did with WebOs. Just shut it down and hold a firesale. This way, you put it in your rear view mirror quickly. Instead, devices issues have haunted Chen since he took over. Clearly, he thinks he can make money with devices but this is his last try.

    Posted via CB10
    I think you misunderstand me. I'm agreeing with you and all of these points except the one about BB10.

    I think Chen did not believe the Classic would really save BB10. I still think it was a stall tactic. We will never know for sure, of course.

    PassportSQW100-4/10.3.2.2789
    00stryder likes this.
    10-17-15 10:38 AM
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