[dbmalloy]

Found this little nugget in the Goldman Sachs downgrade on BB stock this morning .. very sad how Blackberry is lagging so far behind the competition. ( sarcasm)... what do you think...

March 9, 2015, 9:51 A.M. ET
BlackBerry Falls As Goldman Cuts To Sell On Turnaround Challenges

By Teresa Rivas

BlackBerry (BBRY) was lower Monday morning following a downgrade from Goldman Sachs.

Analysts Simona Jankowski and Doug Clark cut their rating on the stock from Neutral to Sell, and lowered their price target by $1, to $9.

They write that BlackBerry has risen more than 60% since John Chen took over as chief executive and started the company’s turnaround, and while he has had success so far, it will be a challenge for the company to shift gears from just cutting costs to actually driving revenue. Indeed, they see widening losses in fiscal 2016 and 2017 rather than the return to profitability that many expect.

From their note:

We think the success of BlackBerry’s turnaround hinges on its ability to grow its Enterprise Mobility Management (EMM) software business, where competitors include Mobile Iron, Airwatch (part of VMware (VMW)), and Good. BlackBerry has set a target of $500mn in Software segment revenues for FY16(Feb), up from $250mn in FY15. We expect it to fall well short of that target and model revenues of $426mn, for two reasons. First, our surveys show very low buying intentions for BlackBerry’s EMM solution. Second, its target implies that it would leapfrog the market leaders in just one year, which we view as unlikely given the competitors’ much better traction (based on our survey). Meanwhile, we forecast below-consensus Service revenues (down 47% in FY16E). While we see significant upside in Hardware revenues, those are “empty calories” as they are not profitable. Thus, we see widening losses based on the shortfall in high-margin Software and Services revenues.

They write that stiff competition is a bigger hurdle than many expect, leading BlackBerry to miss expectations and profitability targets. Their thesis centers on three main points:

1. Software-driven turnaround likely to disappoint – BlackBerry has guided for $500mn in Software revenues in FY16 (Feb), up from $250mn in FY15, as it ramps a new Enterprise Mobile Management business. We expect it to fall short as its target assumes that it can leap frog market leaders Airwatch, Mobile Iron and Good– contrary to our customer surveys. We model $426mn in Software revenues.

2. Expect losses to widen in 2016, prompting more restructuring – We expect widening losses and below-consensus EPS as the legacy high-margin Service revenue falls faster than consensus expectations, while the new Software business grows slower than expected/guided. We model ($0.26) in FY16 EPS vs. consensus of ($0.12), worse than our estimate of ($0.19) in FY15E.

3. Expect sizeable miss in February quarter – While our thesis is primarily driven by our below-consensus view of Software and Services in FY16/17, we also expect a sizeable (13%) near-term revenue miss in the February quarter on weak hardware sales due to a delayed rollout of the Classic. However, we expect that to prove temporary, and expect Hardware sales to drive revenue upside to consensus estimates for FY16/17 on higher ASPs, though not contribute much to EPS given lack of profitability.

BlackBerry was down 4.8% at recent check.

[tickerguy]

Goldman is running book for Mobile Iron's IPO; they don't have a reason to diss their competitors, do they? Oh, and they cite no evidence (note their "surveys"; who did them, how many people, where's the data to look through, etc?)

(It took me 15 seconds to find news articles on them running Mobile Iron's book; they were less than a month old. Never mind that both Good and Mobile Iron are literal cash bonfires. Here's my article on it from this morning: Giggle Of The Day: Goldman's SELL On BlackBerry in [Market-Ticker])

[BB_Junky]

BBRY is its own worse enemy ,the only reason the downfall slowed was because they sold assets , laid off thousands , not for selling millions of devices.
Software is keeping them alive, let's hope it continues but i do see "Good" at the bottom of a lot of emails these days sent from a lot of different companies we use meaning Iphone and Android is strong in the work force.

[trsbbs]

Like I have said, Chens plan doesn't add up.



BlackBerry hates America!

[Ment]

As with alot of news stories although there are kernals of truth to the GS story: I think Chen is too optimistic in BES12 revenue as the pricing strategy to manage non-BB handsets doesn't make sense if you are going whole hog to capture that market instead of supporting BB10, the sky isn't falling either. BBRY will rise/fall between 9.8 to 10.8 until we get firm numbers in the next ER. If you have spare investing cash it would be good to buy on the dips.

[abwan11]

There's been some large bull positions in the last few months, contrary to GS view.

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[Dunt Dunt Dunt]

Surveys do not equal actually marketshare or even what people eventually end up buying. So I wouldn't say that Good or Mobile Iron have surpassed BES yet.

That said, I know that Good and Mobile Iron are seeing HUGE growth, like 1000+% year-over-year. And I haven't heard Chen bragging about anything other than a few million users being added during the free Ez-pass program. And if your a small business looking for an EMM solution, BES sometimes isn't even listed in with some of the comparisons that have been done - the ones where BES is listed are usually still based on BES10 and it really didn't manage iOS or Android devices very well. So I imagine that BlackBerry's hold on the EMM market is slipping away from them.

[lnichols]

Surveys do not equal actually marketshare or even what people eventually end up buying. So I wouldn't say that Good or Mobile Iron have surpassed BES yet.

That said, I know that Good and Mobile Iron are seeing HUGE growth, like 1000+% year-over-year. And I haven't heard Chen bragging about anything other than a few million users being added during the free Ez-pass program. And if your a small business looking for an EMM solution, BES sometimes isn't even listed in with some of the comparisons that have been done - the ones where BES is listed are usually still based on BES10 and it really didn't manage iOS or Android devices very well. So I imagine that BlackBerry's hold on the EMM market is slipping away from them.

Another instance of they might have been too late in their execution. They spun their wheels for a long time and lost a lot of market and mind share. Earnings reports will let us know for sure, but if the BES slides then this company, and their turnaround plan hinged in SAAS is cooked. I can't see QNX and IoT being successful if tied to the name BlackBerry.

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[rohetaku]

Goldman rules the world. Live with it

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[RubberChicken76]

Like I have said, Chens plan doesn't add up.

Everything you say is about how everything is awful, all the time, under every circumstance. Move on to another platform already. All you're doing is trolling.

[bobby1966]

The sales of these new phones will be critical to the phone side surviving.

If they aren't good enough, the next BlackBerry phones will be running android with a Samsung label.

Via my Z30 on the Telus network

[Z10NIZED]

Like I have said, Chens plan doesn't add up.



BlackBerry hates America!

And yours does??

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[prplhze2000]

Read Tickerguys post. Makes some good points.

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[byex]

Goldman is running book for Mobile Iron's IPO; they don't have a reason to diss their competitors, do they? Oh, and they cite no evidence (note their "surveys"; who did them, how many people, where's the data to look through, etc?)

(It took me 15 seconds to find news articles on them running Mobile Iron's book; they were less than a month old. Never mind that both Good and Mobile Iron are literal cash bonfires. Here's my article on it from this morning: Giggle Of The Day: Goldman's SELL On BlackBerry in [Market-Ticker])

^^^^ This.


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[sentimentGX4]

I really don't know what to think but in all honesty of a couple of detailed research reports that I've read none consider BES a serious EMM choice.

The reports don't even bash BES but only mention it aside in a short paragraph versus detailed essays for competitors like Mobile Iron if they mention BES at all. That's how relevant they think BES is.

That's not to mention a remark from Mobile Iron CEO that he considered Air Watch his greatest and only competitor in a conference call.

It's really narrowed down to two. We don�t See Good [Technology] very often. Citrix is fading. The only competing vendor we see is VMware/AirWatch.

BlackBerry took it as a huge snub with a Blackberry fact check but Tinker didn't even mention BES while mentioning other EMM competitors by name and when you think about the context of his statement he really has no prerogative to promote Air Watch.

Most of us on here are consumers. Let's not pretend like we actually know anything about the quality of these products and make it one big conspiracy theory finger pointing game.

[crackberry_geek]

Everything you say is about how everything is awful, all the time, under every circumstance. Move on to another platform already. All you're doing is trolling.

Just because almost every decision made by BlackBerry in the last few years IS awful, and is actually getting worse under Chen... we don't have a right to point that out?

Some of us still appreciate the few things that haven't been ruined yet... and we are here in the hopes of a turn around... it just ain't happening yet.

For me, the few things left that keep me are:

The blinking notification light
The hub
File management
Email attachments

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[lnichols]

The sales of these new phones will be critical to the phone side surviving.

If they aren't good enough, the next BlackBerry phones will be running android with a Samsung label.

Via my Z30 on the Telus network

That's scary because Passport sales seems to have fallen off, Leap won't sell to Z10 or Z30 users, Classic won't appeal to majority of Q10 users, and who knows when/if this slider comes out and how well it will sell. Right my only hope of upgrading from my Z30 is if this Samsung partnership results in a GS6 running BB10 as I have zero desire for a slider.

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[bigbadben10]

BlackBerry better close up shop soon based on this news lol.

Posted by my fabulous Passport

[abwan11]

Goldman rules the world. Live with it

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Whatever that means, ...Elvis is king, who cares.

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[johnny_bravo72]

BlackBerry better close up shop soon based on this news lol.

Posted by my fabulous Passport

Nah... BlackBerry seems to enjoy self flagellation. Let them suffer some more.

Posted from an ME173X

[greatwiseone]

Well, it's not going to be all smooth sailing for John Chen. John Chen has said BB needs to get better at selling, and so he'll just need to keep coming up with things to sell and strategies to sell them.

[Superfly_FR]

AFAIK, BES has actually a user base that overcomes his 3 biggest competitors combined.
So, I'm not sure what OP means with "behind" ... but this may be my poor English ... (not).

- BES12 is just out of the Box.
- BES12 in the cloud is not even launched.
And if you ask me, what competitors fear the most is the later.

As for the "conspiracy"; just let it go.
Dust will settle (and if you want to track something, just look into BBRY institutional investors figures : This downgrade might turn to a kind of "shorts purge")
We'll see how it goes after the 27th.

[Alain_A]

AFAIK, BES has actually a user base that overcomes his 3 biggest competitors combined.
So, I'm not sure what OP means with "behind" ... but this may be my poor English ... (not).

- BES12 is just out of the Box.
- BES12 in the cloud is not even launched.
And if you ask me, what competitors fair the most is the later.

As for the "conspiracy"; just let it go.
Dust will settle (and if you want to track something, just look into BBRY institutional investors figures : This downgrade might turn to a kind of "shorts purge")
We'll see how it goes after the 27th.

is it supposed to be "fear" instead of "fair"????

[RubberChicken76]

Just because almost every decision made by BlackBerry in the last few years IS awful, and is actually getting worse under Chen... we don't have a right to point that out?

Awful for you and some others. The sad reality is that "appeasing you personally" isn't on Chen's priorities. It's on keeping the company alive. And unfortunately, it may not be a company for you. It's certainly why I bought iPhone 6 and not Passport or Classic. Little to do with disliking BlackBerry 10 or key BlackBerry elements and more to do with apps I needed.

If you think you can do a better job at keeping the company alive and meeting your personal needs, you can always submit your resume to [email protected] ...

[crackberry_geek]

Awful for you and some others. The sad reality is that "appeasing you personally" isn't on Chen's priorities. It's on keeping the company alive. And unfortunately, it may not be a company for you. It's certainly why I bought iPhone 6 and not Passport or Classic. Little to do with disliking BlackBerry 10 or key BlackBerry elements and more to do with apps I needed.

If you think you can do a better job at keeping the company alive and meeting your personal needs, you can always submit your resume to [email protected] ...

No thanks... I'm having much more fun running my own company.

Give it a few more quarters and all will see that Chen hasn't saved BlackBerry... only extended the pain with some brilliant bean counting and accounting gimmicks.

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