[xandermac]

http://bits.blogs.nytimes.com/2014/0...e-than-phones/

“Apple has to sell 58 million phones to get, I’d guess, a 10 to 12 percent margin,” said Mr. Chen. “If you’re not first or second in phone sales, where do you get any margin? You could sell 30 million phones and lose money. I have to be realistic here.”

[jaydee5799]

Just make one BB phone....so I have something to buy....and I'll be happy.

[Brandon Orr]

Uh...hence why they have Foxconn making phones for them now.

This isn't a sign that we won't be seeing BlackBerry phones in the future.

- Developer of PinGuin

[TGR1]

http://bits.blogs.nytimes.com/2014/0...e-than-phones/

“Apple has to sell 58 million phones to get, I’d guess, a 10 to 12 percent margin,” said Mr. Chen. “If you’re not first or second in phone sales, where do you get any margin? You could sell 30 million phones and lose money. I have to be realistic here.”

While I always thought handsets would play increasingly less importance in BBRY's future, that quote of Chen's is interesting.

1) Not a good idea not to know what margins his competitor makes (unless he is being somewhat disingenuous)
2) If he is downplaying margins for the top profit maker, that smells of a subtle introduction of rationale for deprecating handsets
3) Not surprising he would not really care about 1) if handsets are not a major part of their future

[bigbadben10]

John Chen is a master at playing this media game. OP, what you posted is a classic example of that. People always seem to think that BlackBerry must sell millions of phones to make money, that is so far from the truth.

We will always have variations of a BlackBerry phone as they have to provide an end to end solution for security reasons. So what they don't have a million different models, as Jaydee stated one is good enough for me Perfect!

[Wiki Cydia]

http://bits.blogs.nytimes.com/2014/0...e-than-phones/

“Apple has to sell 58 million phones to get, I’d guess, a 10 to 12 percent margin,” said Mr. Chen. “If you’re not first or second in phone sales, where do you get any margin? You could sell 30 million phones and lose money. I have to be realistic here.”

That's an awful guess. Apple's company-wide margin was last reported at 35%, which would not be possible if its #1 selling product line (by far) was delivering 10-12%.

[JonCBK]

That's an awful guess. Apple's company-wide margin was last reported at 35%, which would not be possible if its #1 selling product line (by far) was delivering 10-12%.

Agreed. Tear down of iphones price the parts at $200 or so. And Apple gets at least $400 for every phone that is sold.

But his main point is right. Only apple and samsung are currently making profit on sales of smartphones. Google might be mkaing profit indirectly through ads and customer information. But it is a tough business selling handsets.

Posted via CB10

[Andrew4life]

That's an awful guess. Apple's company-wide margin was last reported at 35%, which would not be possible if its #1 selling product line (by far) was delivering 10-12%.

I don't actually know much about Apple earnings but I believe your quoting 35% is gross profit margin.

Chen is talking about net profit margin.




Posted via CB10

[garnok]

Agreed. Tear down of iphones price the parts at $200 or so. And Apple gets at least $400 for every phone that is sold.

But his main point is right. Only apple and samsung are currently making profit on sales of smartphones. Google might be mkaing profit indirectly through ads and customer information. But it is a tough business selling handsets.

Posted via CB10

other android vendor also making money...not as big as the top two but it is starting..

problem is BB have to pay R&D and build BB ecosystem themselves, while android vendor getting huge help from google

[early2bed]

People always seem to think that BlackBerry must sell millions of phones to make money, that is so far from the truth.

Actually, Chen's quote suggests that you do have to sell millions of phone to make any money and implies that Blackberry will not be able to make any margin. The statement ends with him saying that he has to be realistic about the chances of Blackberry ever making any money in smartphones again.

[tchocky77]

Chen has been telegraphing this since the day he took the job.

Blackberry is not going to be making hardware if the next products they introduce don't sell. And I don't think HE thinks they're going to.

Come on. The Q20?! That is a hail-mary folks. The hardware keyboard is as good as dead in 2014. Chen knows that.

...and this is just my .02�. Try not to get your ****-feelings hurt.

Posted via the Android CrackBerry App!

[BB10user07]

Awesome post...needs to go on CB's main page

Posted via CB10

[ibpluto]

other android vendor also making money...not as big as the top two but it is starting..

problem is BB have to pay R&D and build BB ecosystem themselves, while android vendor getting huge help from google

Who else is making money on phones? HTC? Nokia wasn't (not sure how things will lay down for them after the MS Sell off of the Lumina line). Sony?, LG?

Outside of some Chinese handset makers that make devices for no where near here (north America) Samsung and Apple are the only ones making any profits....at least worth talking about. my understanding is that Samsungs margins are thin. They make on volume. I also think the margins Chen is talking about are net, although, a 10-12% can be argued to be pretty good on the volumes they produce.

CB10'n it via da Z

[BroncoVAL]

Very interesting interview even if Apple's benefits may be a little underestimated.
I really think Chen is the good person for Blackberry's come back, but he can't fail any move and he knows it.
Curious to see if and how he'll succeed in associating with Google... that would be a huge step for regaining some credit.
Posted via CB10

[sandman10]

Come on. The Q20?! That is a hail-mary folks. The hardware keyboard is as good as dead in 2014. Chen knows that.
!

I think the Q20 is a brilliant move along with bringing back the "toolbelt". If you recall, the OS7 was outselling the OS10.

Clearly the Q10 was alienating customers who returned them and went back to 9900s

As time moves on, and os7 becomes extinct, which it certainly will, these os7 people will have to transition to OS10 devices. Enter the Q20. It will look and feel familar to them and they will have an easier transition.

Brilliant, just brilliant.

[early2bed]

Not brilliant, rather it's the most convenient thing to do - to say that you are listening to your customers and giving them exactly what they want. The problem is that you end up with a fragmented, directionless platform.

You can see this in discussions about things like the screen aspect ratio. Will it be 1:1 as speculated on the most recent Crackberry podcast? How is that going to run Android apps? How can the platform with the smallest market share have the most number of screen sizes and shapes? What are developers supposed to do with screens that might be square, might be rectangle, might or might not have a keyboard or trackpad and buttons and might or might not support landscape.

Oh, and we also still have a lot of BBOS devices out there so don't forget them. Actually, most of our customers are still BBOS.

“If I had asked people what they wanted, they would have said faster horses.” - may not have been said by Henry Ford

[David Murray1]

I refuse to believe that you need to sell at least 30 million phones to make a 'margin' ... this just makes no sense to me. Whatever happened to firms producing up to the point where MR = MC?

[sixpacker]

I think the Q20 is a brilliant move along with bringing back the "toolbelt". If you recall, the OS7 was outselling the OS10.

Clearly the Q10 was alienating customers who returned them and went back to 9900s

As time moves on, and os7 becomes extinct, which it certainly will, these os7 people will have to transition to OS10 devices. Enter the Q20. It will look and feel familar to them and they will have an easier transition.

Brilliant, just brilliant.

Remember a lot of os7 phones are corporate issue. What these are replaced with is a corporate decision not a personal one. It's also a mistake to think all corporate user love their BlackBerry's (I had a nice bold replaced with a crap curve and I was not happy).

[app_Developer]

I refuse to believe that you need to sell at least 30 million phones to make a 'margin' ... this just makes no sense to me. Whatever happened to firms producing up to the point where MR = MC?

You're forgetting about the costs that are not marginal. Like developing and maintaining a bespoke operating system, for example. Or even just designing, developing and marketing a new model.


Sent from my iPad using Tapatalk

[TGR1]

You're forgetting about the costs that are not marginal. Like developing and maintaining a bespoke operating system, for example. Or even just designing, developing and marketing a new model.

Sent from my iPad using Tapatalk

BBRY also has to find the revenue to keep the lights on and pay employees. They are still by no means the very lean businesses many of the smaller Chinese OEMs are and that puts more pressure on them.

Samsung runs on small margins propped by huge volumes as Nokia used to do. Their sales may be has already slowing and they recently held top management meetings to address next steps. Good of them to start looking early.

[tchocky77]

I think the Q20 is a brilliant move along with bringing back the "toolbelt". If you recall, the OS7 was outselling the OS10.

Clearly the Q10 was alienating customers who returned them and went back to 9900s

As time moves on, and os7 becomes extinct, which it certainly will, these os7 people will have to transition to OS10 devices. Enter the Q20. It will look and feel familar to them and they will have an easier transition.

Brilliant, just brilliant.

Do you think there are enough of "them" for blackberry to survive?

Or do you think it will make people leave either android or ios?

Honest questions.

[garnok]

Who else is making money on phones? HTC? Nokia wasn't (not sure how things will lay down for them after the MS Sell off of the Lumina line). Sony?, LG?

Outside of some Chinese handset makers that make devices for no where near here (north America) Samsung and Apple are the only ones making any profits....at least worth talking about. my understanding is that Samsungs margins are thin. They make on volume. I also think the margins Chen is talking about are net, although, a 10-12% can be argued to be pretty good on the volumes they produce.

CB10'n it via da Z

if you only count their smartphone business HTC, Sony, Lenovo make money...small amount of oney if tou compare it with samsung, apple

samsung profit margin around 18% - 20%, while apple around 30 - 40%. 10 - 12% profit margin is other company like LG, Lenovo who trying to compete with apple/samsung

[sinsin07]

Come on. The Q20?! That is a hail-mary folks. ...snip

Wow

That's a lot of Hail Marys.

The Z10 (Hero Device) was the Hail Mary to Blackberry resurgence
The Q10 was the Hail Mary to keyboard lovers
The Z30 (Hero Device) was the Hail Mary to large screen lovers

As one CB poster put it: "They need a Hail Mary to save them from the Hail Mary"

At some point you have to win the game.

Maybe it's time for a Shotgun play.

[tchocky77]

Wow

That's a lot of Hail Marys.

The Z10 (Hero Device) was the Hail Mary to Blackberry resurgence
The Q10 was the Hail Mary to keyboard lovers
The Z30 (Hero Device) was the Hail Mary to large screen lovers

As one CB poster put it: "They need a Hail Mary to save them from the Hail Mary"

At some point you have to win the game.

Maybe it's time for a Shotgun play.

Exactly! Right? ONE of them was supposed to have worked out by now!

[Dave Bourque]

Exactly! Right? ONE of them was supposed to have worked out by now!

Facepalm...... yea Z30 with 0 ads great hail Mary... Z3 and Q20 have a much better chance of doing well under Chen. accompanied by ads.

Z10STL100-3/10.2.1.2141