[Toodeurep]

Lots of things you "estimated" turned out to be wrong.

Maybe you could compare his estimates and your estimates and the facts just to save the other readers from all the TLDR back-and-forth.

[filmgirl]

The Company recognized revenue related to approximately 7.0 million BlackBerry handheld devices in fiscal 2015, compared to approximately 13.7 million BlackBerry handheld devices in fiscal 2014.Approximately 67% of the devices recognized in fiscal 2015 were BlackBerry 10 devices.

And 67% of 7m is 4.7m, exactly what Ahmad said. They already recognized the revenue on 1.5m of those devices last year, which was before they started differentiating between sold through and shipped, so it's safe to say that even if they did "sell 5.6m devices to customers," because some of that rev/numbers were recognized in F14, we can likely only say they added a 4.7m more BB10 customers.

Regardless, BB still didn't come close to reaching Chen's goal of 10m BB10 handsets for hardware to be profitable. In fact, hardware sales continue to decelerate.

[Maxxxpower]

Well he just monitored other numbers. I'm interested in the number of BB10 devices "in the wild"/sold through to end customers. That's what this thread is about. (I know that there are several uncertainties when trying to calculate this).
His "topic" is based on numbers of devices that may still lay around somewhere waiting for a customer to buy them. Somehow he came to the conclusion that my numbers wouldn't fit the topic (which they do of course) and I would have based my calculation on the wrong numbers. Why? I don't know. I guess he just mixed up the different things. I wanted to monitor the number of devices sold through in this thread and I did. As I said, it's probably possible to find mistakes or uncertainties, but I took the numbers that fitted this topic.

[cbvinh]

Thanks AhmadCentral for analyzing from the source, doing your own analysis instead of quoting from the likes of Seeking Alpha, keeping it on topic and not using personal attacks. It's a better way to present information.

[Toodeurep]

...SNIP...

Regardless, BB still didn't come close to reaching Chen's goal of 10m BB10 handsets for hardware to be profitable. In fact, hardware sales continue to decelerate.

Chen set a goal of "10m" (you mean 10 million right?) BB10 handsets?

[filmgirl]

Chen set a goal of "10m" (you mean 10 million right?) BB10 handsets?

Yup. Says BlackBerry CEO, "If we ship 10 million phones in a year, we'll be profitable on phones" | CrackBerry.com

[Toodeurep]

Yup. Says BlackBerry CEO, "If we ship 10 million phones in a year, we'll be profitable on phones" | CrackBerry.com

Exactly, your post states it as a goal which it isn't and probably never was. The goal as stated by Chen is to be profitable on hardware. He just tossed out a higher than required number so he wouldn't be boxed in. My guess is that number can be much lower. He has now added a wrinkle to the mix and this new wrinkle is very important, he recognizes devices as a "entry" point to software and services.

I guess only time will tell.

[AhmadCentral]

Exactly, your post states it as a goal which it isn't and probably never was. The goal as stated by Chen is to be profitable on hardware. He just tossed out a higher than required number so he wouldn't be boxed in. My guess is that number can be much lower. He has now added a wrinkle to the mix and this new wrinkle is very important, he recognizes devices as a "entry" point to software and services.

I guess only time will tell.

To be honest I'd argue the opposite.

That he said 10 million, implying a low number, to be profitable. The way he said it really does imply that 10m is low and they'll do more than that. FY2015 is the first time ever that sales have been lower than 10 million and so it's really a worry to myself and others that if Chen was quoting 10m as a number to be profitable on hardware that they are well below that number and will continue to be below that number next year as well.

Just to show how much of an impact hardware has had.

The hardware business in FY2014 accounted for more revenue than all of BlackBerry's business (Software+hardware+other) in FY2015. That's how much the company has shrunk.

This year BlackBerry have lost $304 million which thankfuly isn't as bad as last year but still bad.

[Toodeurep]

To be honest I'd argue the opposite.

That he said 10 million, implying a low number, to be profitable. The way he said it really does imply that 10m is low and they'll do more than that. FY2015 is the first time ever that sales have been lower than 10 million and so it's really a worry to myself and others that if Chen was quoting 10m as a number to be profitable on hardware that they are well below that number and will continue to be below that number next year as well.

Just to show how much of an impact hardware has had.

The hardware business in FY2014 accounted for more revenue than all of BlackBerry's business (Software+hardware+other) in FY2015. That's how much the company has shrunk.

This year BlackBerry have lost $304 million which thankfuly isn't as bad as last year but still bad.

So you want to claim that he is more focused on hitting a meaningless milestone hardware sales count rather than being profitable in hardware? You also want to claim that he low-balled a hardware count of 10 million while all the while aware they are trending to only hit that number bi-annually?

Here is what he is quoted to have said...

"If we ship 10 million phones in a year, we'll be profitable on phones, that's the model we're going after." "Model" in this sense is related to being profitable, not shipping 10 million phones.

You also put too much emphasis on hardware. Software and Services are where the money is. Low risk, with massive upside.

[birdman_38]

"If we ship 10 million phones in a year, we'll be profitable on phones, that's the model we're going after." "Model" in this sense is related to being profitable, not shipping 10 million phones.

Think he meant shipping 10 million units per year would keep the division sustainable.

[MarsupilamiX]

Chen updated that in the Q&A... "...95% of shipped are latest devices...
Passport, Classic type..."

I still find it amusing that Chen can't seem to bring himself to say "BB10". LOL

Oh, and he wouldn't be drawn on which device was the bigger seller.

Personally I believe that it's the Passport.
The Classic selling well, wouldn't make any sense imho.

[filmgirl]

Think he meant shipping 10 million units per year would keep the division sustainable.

Exactly. I'm not sure how the hardware division can be worth the time if volumes are this low. Foxconn is taking a lot of the risk sure, but they are also taking any of the profit. Moreover, I have to wonder why Foxconn even cares about 7m devices a year. Like, is that even worth the effort for them. The ASP is growing, which is great, but it's still really low, especially compared to the competition. If you're going to argue that BB can make more money on fewer devices, they need to have way higher ASPs.

I'm not trying to compare BB to Apple, but last quarter, Apple both sold 75m phones to end users and did it with an ASP of $687. An ASP of $211 on 7m handsets (only 4.7m of which are BB10) doesn't spell sustainable to me.

If you're going to treat hardware as a loss leader to push software, fine. But when your software revenues don't match your hardware revenues, that argument is harder to make.

Not trying to be overly negative, but Chen is the one who said 10m was the goal. He's not on,y not close to his goal, he's selling fewer phones each quarter.

[sentimentGX4]

Personally I believe that it's the Passport.
The Classic selling well, wouldn't make any sense imho.

Neither of them selling "well" makes any sense. Hahaha...

Between the two, though, the Classic had much broader carrier/retailer support so I'm more inclined to think that the Classic outsold the Passport. It's true that the Classic was a lackluster device; but Chen's decision to call the device the "Classic" actually did wonders in terms of publicity and interest. It was marketing genius.

For all the negative public perception toward Blackberry, the Classic shows the public still has much more interest toward BB OS7 than BB10 devices. It really puts into perspective the obstacles BB10 faced. Given the continued relatively high interest of BB OS7 to BB10, I'm not confident BBRY hardware would actually be in a worse position today if it had stuck it out with BB OS8.

[MarsupilamiX]

Neither of them selling "well" makes any sense. Hahaha...

Between the two, though, the Classic had much broader carrier/retailer support so I'm more inclined to think that the Classic outsold the Passport. It's true that the Classic was a lackluster device; but Chen's decision to call the device the "Classic" actually did wonders in terms of publicity and interest. It was marketing genius.

For all the negative public perception toward Blackberry, the Classic shows the public still has much more interest toward BB OS7 than BB10 devices. It really puts into perspective the obstacles BB10 faced. Given the continued relatively high interest of BB OS7 to BB10, I'm not confident BBRY hardware would actually be in a worse position today if it had stuck it out with BB OS8.

I see your point, and for once mine is far less complicated to explain:
Gut feeling

Well and me mostly seeing Passports instead of Classics, when it's a physical keyboard BlackBerry.

The stats I have seen, show that the Classic form factor (small display, keyboard, looks like the BBOS abominations) would be far less desired than the Passport
(big display, 3 row keyboard, nothing like BBOS and at least mildly innovative).
The other reason is the price of the Classic. At 450$, it comparatively doesn't make any sense economically, to not go with the 600$ Passport (the Passport is pretty much 3 times the Classic, in terms of specs).

Also, at 450$ I'll get some really nice Androids and iPhones already.
I guess I just want to say that, between those 2 phones, the Passport is so much better, that it would only make sense to buy the Classic if you are upgrading from a Bold.
The Passport however, makes sense for everyone who doesn't want a small display and specs from 4 years ago.

So, following that train of thought, buying the Classic over the Passport wouldn't be logical, as long as you do not adore the Bold form factor more than anything.
Which implies that the Passport is the phone of these 2, that could intrigue other platform users.

But yeah, you could be correct as well. Just a gut feeling after having seen some indicators.

[Toodeurep]

Think he meant shipping 10 million units per year would keep the division sustainable.

So would 20 million and 30 million too, but that is not what I was trying to point out. The poster above said hardware didn't even come close to Chen's goal of 10 million units, but Chen's goal is profitability. Chen himself said on camera that they are close to that goal, he even spun it in a way where he could claim they were there. He also acknowledged that devices are an entry point to software and services. All of this on camera.

[Toodeurep]

Exactly. I'm not sure how the hardware division can be worth the time if volumes are this low. Foxconn is taking a lot of the risk sure, but they are also taking any of the profit. Moreover, I have to wonder why Foxconn even cares about 7m devices a year. Like, is that even worth the effort for them. The ASP is growing, which is great, but it's still really low, especially compared to the competition. If you're going to argue that BB can make more money on fewer devices, they need to have way higher ASPs.

I'm not trying to compare BB to Apple, but last quarter, Apple both sold 75m phones to end users and did it with an ASP of $687. An ASP of $211 on 7m handsets (only 4.7m of which are BB10) doesn't spell sustainable to me.

If you're going to treat hardware as a loss leader to push software, fine. But when your software revenues don't match your hardware revenues, that argument is harder to make.

Not trying to be overly negative, but Chen is the one who said 10m was the goal. He's not on,y not close to his goal, he's selling fewer phones each quarter.

To your first point: You answer it yourself in your third paragraph lol. Chen also addressed that on camera.

To the bulk of your last point: Again, Chen didn't set 10 million as the goal, he set profitability as the goal.

And yes, hardware revenue and units sold are both trending very badly for BlackBerry. For most all other manufacturers it is just revenue.

[birdman_38]

So would 20 million and 30 million too, but that is not what I was trying to point out. The poster above said hardware didn't even come close to Chen's goal of 10 million units, but Chen's goal is profitability. Chen himself said on camera that they are close to that goal

Then he shouldn't have thrown that 10 million number out there. I believe that was when Chen was still making wreckless statements. He's toned down now.

[GadgetTravel]

Of course that is what he meant. The shipping of 10 million was what was required to be profitable on hardware.

[GadgetTravel]

So would 20 million and 30 million too, but that is not what I was trying to point out. The poster above said hardware didn't even come close to Chen's goal of 10 million units, but Chen's goal is profitability. Chen himself said on camera that they are close to that goal, he even spun it in a way where he could claim they were there. He also acknowledged that devices are an entry point to software and services. All of this on camera.

Chen was saying that selling 10 million was the minimum number for them to make a profit with hardware. That was the threshold number. So yes, they missed that by a lot. Perhaps even more concerning is that the members are dropping.

[AhmadCentral]

At the moment cost of sales is = to revenue from sales. (Hardware)

And that's excluding additional R&D, Marketing & other costs within hardware as well.

Now of course they didn't have to write off as much stock as last year (Z10) which made this year look better than last. But they basically cut back on costs so much just to break even (excluding other R&D/Marketing etc..)

Next year (CY2015) will be tough.

[dararede]

No need to argue how much they sold as long as hardware is making money it is good. From 0:44

[Maxxxpower]

Chen was saying that selling 10 million was the minimum number for them to make a profit with hardware. That was the threshold number. So yes, they missed that by a lot.

If he referred to devices (BB7+10) sold through, he missed the goal "only" by 1.5 mio, as 8.5 million devices were sold to end customers.

[birdman_38]

No need to argue how much they sold as long as hardware is making money it is good.

So negative sales trends and missing targets are irrelevant?

[AhmadCentral]

If he referred to devices (BB7+10) sold through, he missed the goal "only" by 1.5 mio, as 8.5 million devices were sold to end customers.

Sold through doesn't matter to BlackBerry so much.

It's the devices they sell in and recognise revenue on that matter.

There comes a point though where there is a minimum number that needs to be sold in for their hardware division to be profitable. Especially as ASP dropped ~$70 YOY and manufacturing costs increase. BlackBerry are not making a profit on their hardware division at the moment when you include all costs and their hardware revenue is dropping year on year whilst software and Other is not growing at all.

So we really need to see Software revenue grow next year if BB want to continue with their hardware division.

[GadgetTravel]

If he referred to devices (BB7+10) sold through, he missed the goal "only" by 1.5 mio, as 8.5 million devices were sold to end customers.

15% is a huge miss in my opinion.

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