01-02-12 06:21 PM
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  1. just_luc's Avatar
    There's another thread on here today about whether BB10 will be enough to 'save' RIM, and several more similar.. and I have to say I just don't understand the question.. It seems every argument on RIM's failings has to do with the drop in market share.. Now I am not an economist, but I have been in business for a long time, and I can tell you market share is an absolutely useless measurement of how well a company is doing..

    Lets take this scenario for example..

    You live in a small town, and you open a sandwich shop.. your doing very well, and you sell $100,000 dollars worth of sandwiches.. your are very happy with this, you play the status quoe and you just make that hundred grand every year.. your income is steady and you have 100% of the sandwich market in your town. NOW Subway rolls into town and opens a store.. they put out a huge marketing plan.. more people start eating sandwiches.. the next year subway make $300,000 dollars and you make $150,000 dollars. Oh no, your market share has dropped from 100% to 50%, that must be terrible!!! But wait, last year you sold $100,000 dollars worth of sandwiches, and this year you sold $150,000 dollars worth... WHO CARES WHAT SUBWAY SOLD, OR WHAT YOUR MARKET SHARE IS? YOU SOLD 50 GRAND MORE THEN LAST YEAR!!!

    Obviously this is a very simple example.. but this is RIM's situation.. being as they where one of the first smartphone makers, yes their market share has dropped, and it continues to do so.. but not because they have lost a single subscriber.. but because the market as a whole has gotten bigger.. in fact RIM has continued to ADD subscribers year after year and are now at their highest user base EVER! But you want to call it failing because someone else is doing better? Such is life, there will always be someone doing better then you, but that has NOTHING to do with how well you are doing.

    Unless a day comes where we see the number of subscribers actually falling..RIM is doing just fine..
    12-31-11 12:10 PM
  2. app_Developer's Avatar
    Well, first your sandwich shop isn't owned by the public. RIM is, and so the owners matter with respect to the outcome.

    Second, in reality, the fast food places do drive the small sandwich shops into bankruptcy. We've seen this story repeated thousands of times in small towns everywhere. The ones who survive are generally the ones who go upmarket. So they leave the cheap $5 meals to McDonalds, and sell higher quality meals for the higher end of the market.

    RIM is doing the opposite right now, moving lower in the market overall in order to make their quarterly results at least palatable and pad their subscriber numbers (see public owners).

    Another difference of course is that your sandwich shop sells directly to customers. RIM does not.

    Also, users don't expect that their sandwich will be compatible with their bank, or their favorite movie service, etc. Banks and other businesses tend to support the more popular devices.

    Lots of reasons why you can't just ignore what is going on in the market in general.

    Plus, don't forget this quarter RIM expects fewer unit sales and less revenue. Yet another difference.
    Last edited by app_Developer; 12-31-11 at 12:28 PM.
    12-31-11 12:25 PM
  3. Spencerdl's Avatar
    +1....well said. I agree 100% (post #1)
    Last edited by spencerdl; 12-31-11 at 12:32 PM.
    just_luc likes this.
    12-31-11 12:30 PM
  4. just_luc's Avatar
    Well, first your sandwich shop isn't owned by the public. RIM is, and so the owners matter with respect to the outcome.

    Second, in reality, the fast food places do drive the small sandwich shops into bankruptcy. We've seen this story repeated thousands of times in small towns everywhere. The ones who survive are generally the ones who go upmarket. So they leave the cheap $5 meals to McDonalds, and sell higher quality meals for the higher end of the market.

    RIM is doing the opposite right now, moving lower in the market overall in order to make their quarterly results at least palatable and pad their subscriber numbers (see public owners).

    Another difference of course is that your sandwich shop sells directly to customers. RIM does not.

    Also, users don't expect that their sandwich will be compatible with their bank, or their favorite movie service, etc. Banks and other businesses tend to support the more popular devices.

    Lots of reasons why you can't just ignore what is going on in the market in general.

    Plus, don't forget this quarter RIM expects fewer unit sales and less revenue. Yet another difference.
    your missing the point of my metaphor.. I know sandwiches and cell phones aren't the same.. but to your point if Subway was causing the small sandwich shop to sell less sandwiches.. then yes you would be correct, small business's go under do to large corporations all the time.. but in my example the small shop sold more then the year before despite the fact that subway sold even more.. no reason for the shop to go bankrupt.. the only stat they're down on is market share and that in no way affects there bottom line.

    The fact is RIM has more active users today then they had at this time last year. Its just a fact.

    If there comes a time when they have less subscribers then the year before then there would be a legitimate concern, but that has not happened yet in 12 years.
    Last edited by just_luc; 12-31-11 at 12:34 PM.
    recompile and Mecca EL like this.
    12-31-11 12:31 PM
  5. Spencerdl's Avatar
    Well, first your sandwich shop isn't owned by the public. RIM is, and so the owners matter with respect to the outcome.

    Second, in reality, the fast food places do drive the small sandwich shops into bankruptcy. We've seen this story repeated thousands of times in small towns everywhere. The ones who survive are generally the ones who go upmarket. So they leave the cheap $5 meals to McDonalds, and sell higher quality meals for the higher end of the market.

    RIM is doing the opposite right now, moving lower in the market overall in order to make their quarterly results at least palatable and pad their subscriber numbers (see public owners).

    Another difference of course is that your sandwich shop sells directly to customers. RIM does not.

    Also, users don't expect that their sandwich will be compatible with their bank, or their favorite movie service, etc. Banks and other businesses tend to support the more popular devices.

    Lots of reasons why you can't just ignore what is going on in the market in general.

    Plus, don't forget this quarter RIM expects fewer unit sales and less revenue. Yet another difference.
    Its called a hypothetical example
    12-31-11 12:35 PM
  6. howarmat's Avatar
    ok given what you have said here are some facts from US stats on blackberry users. Now granted overall they have increased to 75 million worldwide.


    http://forums.crackberry.com/news-ru...ml#post6983052

    First number is the number of smartphones and the second is BB share of that
    Apr-10 8.4% total 234 million 19.6 million
    May-10 8.7% 49.1 million 41.7% 20.5 million
    Jul-10 9.0% 53.4 million 39.3% 21.0 million
    Aug-10 9.0% 55.7 million 37.6% 20.9 million
    Sep-10 9.3% 58.7 million 37.3% 21.9 million
    Oct-10 9.3% 60.7 million 35.8% 21.7 million
    Nov-10 8.8% 61.5 million 33.5% 20.6 million
    Dec-10 8.5% 63.2 million 31.6% 20.0 million
    Jan-11 8.6% 65.8 million 30.4% 20.0 million
    Feb-11 8.6% 69.5 million 28.9% 20.1 million
    Mar-11 8.4% 72.5 million 27.1% 19.6 million
    Apr-11 8.2% 74.6 million 25.7% 19.2 million
    May-11 8.1% 76.8 million 24.7% 19.0 million
    Jun-11 7.9% 78.5 million 23.4% 18.4 million
    Jul-11 7.6% 82.2 million 21.7% 17.8 million
    Aug-11 7.1% 84.5 million 19.7% 16.6 million
    Sep-11 7.1% 87.4 million 18.9% 16.5 million
    Oct-11 6.6% 90.0 million 17.2% 15.5 million
    Nov-11 6.5% 91.4 million 16.6% 15.2 million
    12-31-11 12:44 PM
  7. app_Developer's Avatar
    your missing the point of my metaphor.. I know sandwiches and cell phones aren't the same.. but to your point if Subway was causing the small sandwich shop to sell less sandwiches.. then yes you would be correct, small business's go under do to large corporations all the time.. but in my example the small shop sold more then the year before despite the fact that subway sold even more.. no reason for the shop to go bankrupt.. the only stat they're down on is market share and that in no way affects there bottom line.

    The fact is RIM has more active users today then they had at this time last year. Its just a fact.

    If there comes a time when they have less subscribers then the year before then there would be a legitimate concern, but that has not happened yet in 12 years.
    Let me try to summarize the issues again:

    RIM is a public company. They cannot continue at this trajectory the way a Mom and Pop business can.

    Two, over time people won't buy the device that isn't compatible with the other products they buy. So that's why market share matters.

    Three, RIM's sales are about to get a lot worse this quarter and the next 3. The subscriber numbers are a lagging indicator because RIM went downmarket last two quarters to pad them. Other failing companies have done that in the past. This is not new.

    Four, RIM has no retail presence of their own.

    Currently RIM is worth more taken apart than it is kept together as one company. People are noticing that. If they don't turn things around in 2012, that situation will only get worse.

    These are reasons RIM is in trouble, subscriber count notwithstanding.
    Last edited by app_Developer; 12-31-11 at 01:19 PM.
    12-31-11 12:48 PM
  8. just_luc's Avatar
    ok given what you have said here are some facts from US stats on blackberry users. Now granted overall they have increased to 75 million worldwide.


    http://forums.crackberry.com/news-ru...ml#post6983052

    First number is the number of smartphones and the second is BB share of that
    Those number as accurate howarmat.. I won't try and negate that.. BUT.. RIM is not a US company.. they are based in Canada and operate internationally.. as you said yourself, the worldwide numbers are at an all time high of 75 million and climbing.. so I think my point still holds..

    That said, I think so much of the negativity stems from the fact that they are doing poorly in the US, as most of the reporting, social media users, stock markets etc are US based.. my point was and is, that US perception does not equal global reality.
    Last edited by just_luc; 12-31-11 at 12:52 PM.
    12-31-11 12:50 PM
  9. howarmat's Avatar
    you are very much correct. Most all of the negativity is create from the US. You will see a couple UK articles here and there but its still based from or on material from the US.
    just_luc, the_sleuth and jjca like this.
    12-31-11 12:54 PM
  10. app_Developer's Avatar
    Whenever a company is going down, or an economy, or a political candidate, you don't see all of the indicators go down at once. That's why people look at leading indicators versus trailing indicators.

    There is always going to be one or two trailing indicators to appease people who don't want to accept reality (for emotional or patriotic reasons or whatever).

    I hope RIM finds a way to turn things around this year. But to say that they aren't in major trouble right now is foolish. In other countries they have become a low to mid market brand. Even the Playbook now competes at the low end of the tablet market, and it remains to be seen if they can return to the $500 end of the market.

    This is not a long term defensible position at all for a company structured the way they are. That's just a short term move.
    Last edited by app_Developer; 12-31-11 at 01:06 PM.
    12-31-11 01:02 PM
  11. app_Developer's Avatar
    Its called a hypothetical example
    I think the word you are looking for is "analogy".

    But it's an analogy that doesn't work in this case, because of all the reasons I outlined, plus others.
    12-31-11 01:09 PM
  12. sleepngbear's Avatar
    I think everyone has valid points here, but the most critical one is what app_Developer is raising: RIM is a publicly held company. As such, its executive management has a duty to its shareholders to maximize profits; that's why those shareholders invest in the company in the first place. Looking at RIM on its own, it has done respectably; but it has made some strategic blunders that have severely hampered its growth potential at the same time its competitors are growing exponentially. RIM's position in the whole market, while it may mean little to its existing loyal customers, is a critical measure of its growth outlook; and right now, that outlook is bleak. Because of that, all those shareholders have seen their collective stake in the company deteriorate from over $60 billion in mid 2009 to about $7.5 billion today. Further deterioration is what the company needs saving from, and it remains a pretty big question whether BB10 devices can do it, even if they are executed to perfection.

    Again, this macro-level analysis means little to those of us who are already content with the BB experience. One of the problems I see here sometimes is people getting the two unnecessarily entwined. I.e., the company's overall performance and competitive position have exactly zero to do with whether or not I'm happy with its products. It may, however, have some bearing on how long I'll be able to enjoy those products if for some reason its driven completely out of the market place. That seems like an unlikely scenario right now, but it isn't impossible.
    12-31-11 01:19 PM
  13. app_Developer's Avatar
    We also have to remember that the investors are not just Americans.

    Asian and European investors (funds and individuals) are a huge factor in the markets. If they were bullish on RIM, the stock wouldn't be selling at around book value right now.
    Laura Knotek and JBenn911 like this.
    12-31-11 01:27 PM
  14. Laura Knotek's Avatar
    We also have to remember that the investors are not just Americans.

    Asian and European investors (funds and individuals) are a huge factor in the markets. If they were bullish on RIM, the stock wouldn't be selling at around book value right now.
    Very true. By the same token, Americans frequently invest in Asian and European stocks.
    12-31-11 01:49 PM
  15. Dapper37's Avatar
    When New's is driven by whatever anyone wants to say (bgr) as apposed to the facts. Things like this are hard to stop. its a Canadian disadvantage that we do not have Canadian media that reaches the world, like our American friends.
    If the truth mattered in the American media they might have stopped by the largest resource for anything BB. Crackberry and found out that 80% of owners LOVE their PB and have no idea how all this BS has been spread. Perhaps somebody one of them should have asked us in the first place. The truth wont sell. Even less so when your up against the home town hero.
    Its not a slag, more like a statement of the obvious. Its clear that anyone in a position of advantage is going to take it. The same goes for groups and more.
    Last edited by Dapper37; 12-31-11 at 02:05 PM.
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    12-31-11 01:59 PM
  16. Economist101's Avatar
    The fact is RIM has more active users today then they had at this time last year. Its just a fact.
    True. In fact, they have 40% more this year than the same time last year. So why are profits down 70%? It's simple: subscriber revenue is nice, but it's no replacement for hardware revenue. As a result, even as the total number of "subscribers" continues to grow, profits have been slipping badly for the last 4 quarters.
    Mecca EL likes this.
    12-31-11 01:59 PM
  17. belfastdispatcher's Avatar
    True. In fact, they have 40% more this year than the same time last year. So why are profits down 70%? It's simple: subscriber revenue is nice, but it's no replacement for hardware revenue. As a result, even as the total number of "subscribers" continues to grow, profits have been slipping badly for the last 4 quarters.
    I believe their profits are down because of the PlayBook losses, nothing to do with the Blackberry phones.
    JAGWIRE likes this.
    12-31-11 02:04 PM
  18. app_Developer's Avatar
    I believe their profits are down because of the PlayBook losses, nothing to do with the Blackberry phones.
    Did you look at the numbers before believing that? Earning were down even if you exclude the Playbook.

    Forecasted earnings for this quarter are down as well.
    12-31-11 02:19 PM
  19. Economist101's Avatar
    I believe their profits are down because of the PlayBook losses, nothing to do with the Blackberry phones.
    I never said BlackBerry phones were losing money; what I said was that RIM'S subscriber revenue is a poor replacement for hardware revenue.
    Mecca EL likes this.
    12-31-11 02:25 PM
  20. belfastdispatcher's Avatar
    I never said BlackBerry phones were losing money; what I said was that RIM'S subscriber revenue is a poor replacement for hardware revenue.
    But's it's not a replacement, it's an addition revenue.
    Dapper37 likes this.
    12-31-11 02:30 PM
  21. belfastdispatcher's Avatar
    Did you look at the numbers before believing that? Earning were down even if you exclude the Playbook.

    Forecasted earnings for this quarter are down as well.
    Yes I did, the PlayBook and the Outage took the difference in profits.
    12-31-11 02:32 PM
  22. Economist101's Avatar
    But's it's not a replacement, it's an addition revenue.
    Yes, but despite 40% more subscribers, RIM's profit is trending downward in the high double digits, which tells us that the 40% increase in subscriber gains don't begin to offset the declines elsewhere. The PlayBook isn't helping either.
    12-31-11 02:47 PM
  23. Economist101's Avatar
    Yes I did, the PlayBook and the Outage took the difference in profits.
    Wrong. The PlayBook charge was $485 million; the outage charge was $54 million. Even if we add both of those back on to the $265 million net, the number hits $804 million, which is still 11%/$107 million off the pace set during the same quarter last year.
    12-31-11 02:51 PM
  24. sleepngbear's Avatar
    And THAT is why the two half-CEOs stopped reporting ARPU. ARPU is plummeting. At this ARPU decline rate, RIM would need to sell every person on Earth three devices in order to have revenue growth a few years from now. I don't see that as likely. Do you?

    RIM is a walking dead zombie company. Go to these third world companies where RIM is hanging on and offer to sell them a new 2005 Pontiac Sunfire for $7,000USD, they'll be thrilled to have something that nice. But that brand is dead in the first world and that car can't touch 2012 competitors.

    It's no great prize selling a phone for $30 to someone in a "Undefeated Super Bowl XLII Champions, New England Patriots 19-0" shirt. That buyer isn't exactly the top of the food chain.
    This is not exactly a fair assessment. First off, RIM is not a walking dead zombie company. Struggling, yes, but far from in the grave.

    Secondly, the markets in which RIM is currently having success outside of North America are emerging markets, not necessarily 'third-world' countries where they're all living in grass huts and pulling drinking water from mudholes in a bucket. I really loath this snobbish attitude that confuses lesser-privileged with primitive. Soviet Union, China, parts of Europe, developed regions of Asia, South America. Whether they are up to your unrealistic and uninformed standards or not, they are all consumers of technology; but they aren't spoiled brats that need to have the latest and best of everything yesterday. They are equally important to the manufacturers, maybe more so in that they represent more growth potential than your so-called first-world markets.

    If you think you're the top of the food chain with that kind of attitude, God help humanity.
    Last edited by 18to7fiddy; 12-31-11 at 02:56 PM.
    12-31-11 02:52 PM
  25. belfastdispatcher's Avatar
    Wrong. The PlayBook charge was $485 million; the outage charge was $54 million. Even if we add both of those back on to the $265 million net, the number hits $804 million, which is still 11%/$107 million off the pace set during the same quarter last year.
    11% is not that bad in a recession no? Rim's problems started with the PlayBook and it lost Rim a lot of money.

    BBOS devices are as strong as ever, profit and numbers sold if you take the PlayBook, QNX and all other companies they purchased since then.
    12-31-11 03:00 PM
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