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Z3 competes directly with BB07 device on price point. Of course it's a much better device and would make BB07 users switch to it.
70% of gross profit services dollars comes from BIS/BB07 users. On Z3 margins would be very less as Fox conn would be taking a big cut and it's a low priced phone to begin with. Isn't Z3's success also a risk to Blackberries service revenue dollars? Can someone explain what am I missing here?
Posted via CB10
you arent missing much. I think the goal is to get more bb10 phones out there and this will help with it. Margins will be less and the will lose BIS fees are more people switch so I am guessing the numbers can go either way in the end BUT more bb10 devices out there has to be a good thing in most anyones eyes
I think it helps with the ARPU.
with BBOS the ARPU for every subscriber, is less about 3-15usd per month, give and take and its not the full amount BlackBerry receives.
the potential ARPU per customer via BB10 is much higher, especially with the BBM Money and the in app purchases, even if perception is that you can install pirated apks into BlackBerry devices. Assuming that some silly crackhead of a writer assume that all BlackBerry users are pirates as even remotely correct.
I really doubt that BlackBerry can earn the margins better on a Z3 compared to other devices, but what is confirmed is that Foxconn can earn the margins on repairs, and warranties, whereas BlackBerry can avoid the losses on that part.
Potential revenue is not guaranteed revenue, but the potential revenue is so much bigger than the measly guaranteed revenue, and BlackBerry is hoping to expand more potential revenue. Even stickers alone can earn MORE than a month's BIS revenue.
The question I suppose is that can BlackBerry make their services desirable to the point that people will purchase without considering (no second thoughts) it?
Also the ultimate goal, I think, to attract new and lost BlackBerry users and get bbos users to upgrading their phones. If they finally meet bb10 and stick with it, sooner or later they will want to go to a better model.
If BlackBerry can go from 1.2M bb10 devices to 4 ~5 M devices a quarter the platform will become a success and will hopefully attract more developers who will provide new (native) app solutions.
In return there will be more app sales, and more potential for BlackBerry monetization. Also with getting back more people on bb10, companies will more likely look into BES 12.
Posted via CB10
Just as I thought, too..
As the case with Z10 users upgrading to Z30 when they see the potential of Z30..
It could be the case of people buying the Z3 just to check out what's being offered experience wise on BB10.
Posted via Astro on Z30STA100-2/10.2.1.2947
They have a goal of making their hardware division profitable and to also get BB10 adoption higher.
Posted via CB10
I suspect they're looking to just offload the hardware to Foxconn so that they really can't loose money on hardware which is what will really hurt them moving forward. If it costs them more than what they make to build and sell devices it's probably easier to just get someone who can make them at no cost to BlackBerry even if they will loose service revenue at least on the one hand the costs are cut and on the other hand service revenues are never a guaranteed thing.
- Developer of PinGuin
It WOULD be a double-edged sword if BB's current phone business was profitable, but it isn't - they've been losing money on it for over a year.
Under the current deal, Foxconn will take all the risks, and will reap nearly all of the rewards from the sale of the phones themselves, while BB will likely only get a tiny cut of the profits from the sales of the phones (if there are any), and will, hopefully, make money by providing services to those phones' owners, via BB World revenues, primarily. If they sell a lot of Z3s (many millions), then that might also attract some developers to the platform, which could give the ecosystem a little bit of positive momentum - something it hasn't had in a long time.
If the Z3 doesn't sell, Foxconn could decide to scrap the contract (or BB could), and BB's hardware business might be over right there.
Everyone needs to quit worrying about BIS revenue. BBRY needs to quit with it and find other ways to make money. BIS was a good revenue source but those days are over. Unless you all want to pay extra for it, I don't when I can use anything else without the extra cost to slow my phone down. I can't say for sure but I don't think carriers like paying BBRY when they pay no other phone manufacturer because people buy their phones.
There are many players. Z3 will take away sales from Z30/Z10. But Z3 will also take away sales from Samsung, LG, HTC, Nokia, ... which is great for market share.
So either, Blackberry sits idle and allows the low end market to squeeze out their high end sales or they let FoxConn battle this market for them. I think Z3 with BB10 will take a huge chunk of WP and Android sales. Also, market share will help strengthen the brand, BBM (pre-loaded) will help the IM front, and app commissions will help as well.
I wonder how well Z3 would do in China!
As for financials, Blackberry will cut their hardware division expenses significantly with this move and I don't think their high end consumer / enterprise customers would suddenly go low-end.
Who cares about BIS? It's dying. Even if compression was important, it's clear that developing nations are dumping BBOS for other OS. WiFi is more and more becoming cheap and plenty. Cloud and security is the big margin tickets they need to focus in on if they are looking forward. Either way, BIS will be dead in the not too distant future imho.
Posted via CB10 - Z30STA100-5/10.2.1.2141/Telus
Agreed in 1st world only. BIS numbers remained strong because Blackberry was moving BIS service to emerging markets. I travel a lot to emerging markets and let me tell you, BIS for $1-2 is great and allows people to email/facebook/whatever for a good price. There are no other feasible alternatives. 3g/4g won't be hitting those markets anytime soon and besides, new demand from newer emerging markets will come. I believe BIS will be around for at least another decade.
The real winner will be BES. Blackberry is currently #1 and trust me, the competition is junk. We tried 2 competitors and work and abandoned them. Check out this infographic:
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