12-28-13 06:26 PM
94 ... 234
tools
  1. blueberrymerry's Avatar
    That BB10 phone aimed at the Indonesian market sounds like a desperate last-ditch effort. It would have to be cheap like dirt cheap, priced somewhere along the cheapest Curves, not anywhere near the Z10's or Q10's crazy pricing.

    A firesale of BB10 inventory probably wouldn't go well because you can get cheap Android (Moto G) and Windows Phone devices (various Lumias) at the same price, but with the crucial element of support behind them. You get a cheap Z10 and you could be stuck with no updates and a barren app store.

    Z10/Q10/Z30 users, meet some PlayBook users, we're all in the same sad sinking boat...
    milo53 and JeepBB like this.
    12-21-13 02:11 AM
  2. cgk's Avatar
    Something I cannot work out from the call or release - what was the inventory write down on? Q devices? Z30.


    Sent from my iPad using Tapatalk HD
    12-21-13 04:38 AM
  3. kevinnugent's Avatar
    Something I cannot work out from the call or release - what was the inventory write down on? Q devices? Z30.


    Sent from my iPad using Tapatalk HD
    $4.4bn. The kitchen sink.
    12-21-13 04:55 AM
  4. Troy Tiscareno's Avatar
    Something I cannot work out from the call or release - what was the inventory write down on? Q devices? Z30.
    It wasn't a write-down on specific devices (some have almost certainly been included), but a write-down on the value of ALL of their assets, which includes:

    • patents
    • BB10
    • BES10
    • QNX
    • BBM
    • Any existing smartphone components purchased but not yet made into phones.
    • Phones actually produced and assembled.

    In other words, they've had to lower the official value of ALL assets they have on paper to match the current market value. It's kind of like if you'd bought a house for $500,000 (say, in 2007), and today that house is worth $200,000. You're still paying on your $500,000 loan that you took out in 2007, even though if you tried to sell the house today, you'd come up $300,000 short of what you owe the bank (minus whatever principle you've managed to pay off to date). Even if you have no plans to sell your home, on paper, you've lost $300,000.

    Now, if you continue to stay in the home and make your payments on time, then over time, it's likely that the value of your home will rebound, and, maybe 5-10 years down the road, your home's value might work back up to $500,000, bringing you back even. It might even be worth $1M 25 years from now, so you'd have made a profit. But if you sold it today, you'd take a huge loss.

    The value of BB has taken a huge loss. If BB tried to sell their assets today, they'd get pennies on the dollar for them, so they were forced to write down the book value of those assets to match the current market value. Hopefully, BB can hang on to all those assets, and rebuild their value over time. That's not guaranteed to happen, of course, but if BB sold them today, then the loss would be certain. In the future, it's possible that the value of those assets will rise again.
    m1a1mg, JeepBB, milo53 and 1 others like this.
    12-21-13 05:13 AM
  5. the_sleuth's Avatar
    Yes, this happens when a new CEO takes over. It's called taking a big bath writedown. Bank of America did it when it took over Merrill Lynch. HP writedown was $19 billion.

    According to my calculations, BlackBerry's tangible book value is now $5.11 per share. The largest asset writedowns in ranking order were inventory, intangible assets (patents etc), and plants / equipment.

    John Chen et al will have to invest in R&D and deliver some exciting new products & services for the balance sheet to expand again.
    12-21-13 07:15 AM
  6. NYC10065's Avatar
    Yep, I'm not sure why people are seeing this as good news.

    Actually, I do... it's simply BB fans having personal interest in wanting BB to continue to produce phones for them - despite that they'll sell very few to the market overall.

    BB is in the same boat they always were. The only difference is instead of offering a BB7 device to Indonesia, they're making a low end BB10 device for them. The rest of the world? Nothing really changes. BB is sitting on a boat-load of BB10 inventory. No one wants them at their current price, and the only way to move them is if they have a fire-sale.

    How does this help them in the future? Are they still going to produce phones for the rest of the world? If so, what will make this new phone so special? If it's BB10, then they're wasting their time... the market already responded with a resounding NO!!!.

    So what magical thing is going to happen in the handset world that will save Blackberry?
    I agree entirely. Foxconn doesn't have a giant barrel of smartphone pixie dust lying around that it can sprinkle on this disaster. All this is about is accounting and corporate re-engineering which allows BBRY to jettison its handset division at the lowest possible cost to itself. For as long as I can remember, analysts were saying how the handset division has been a drag on BBRY's profitability so this move is a response to that.

    As for the future of BBRY handset. I again ask the question I originally posed which is: what can Foxconn develop that BBRY couldn't to make handset any more attractive as a division? In my mind, the issue wasn't the quality of the hardware's build (yes, they aren't perfect) but rather the awful disaster of an OS that BB10 represented. In other words, from my perspective people purchase iOS, Android, Windows Phone or BB10 devices first based on:
    1) cost (what can I afford);
    2) OS (which OS gives me what I am seeking == apps? security? entertainment?);
    3) hardware specs based on #1 and #2

    By jettisoning hardware, will BBRY make BB10 OS any more appealing to the consumers or to enterprise?

    The decline started with BBOS when consumers (including the so-called prosumers) defected to other OS's since BBOS did not give them the experience they were seeking. BB10 was supposed to address those concerns but miserably failed to do so. So hardware goes to Foxconn but what changes are being made to BB10 to make BB10 any more appealing than it is today? Given the pathetic sales figures, it is clear that BB10 appeals to a tiny niche within a small niche that is getting tinier by the quarter.
    RH1Pearl and kevinnugent like this.
    12-21-13 07:32 AM
  7. berklon's Avatar
    John Chen et al will have to invest in R&D and deliver some exciting new products & services for the balance sheet to expand again.
    And the chances of that happening are between slim and none.
    milo53 and techvisor like this.
    12-21-13 07:33 AM
  8. qwerty4ever's Avatar
    After using the BlackBerry Q5 for several hours this smartphone properly priced could have enticed some BlackBerry 5/6/7 smartphone users to migrate to the BlackBerry OS 10 platform. There is space for a trackpad without increasing the size of the device. In my opinion the BlackBerry Q5 should have been the BlackBerry Bold 9700/9780/9790 replacement but BlackBerry failed to market it.

    Posted via the BlackBerry Q5 using CB10.
    12-21-13 09:06 AM
  9. qwerty4ever's Avatar
    I agree with you on the need to update the OS of current PlayBook or a new device all together but on the track pad you definately lost me there. The track pad is useful on BBOS but I don't think it will go well with the whole idea behind BB10.
    I did not say I need the trackpad but some people prefer it when positioning the cursor or navigating web pages for instance. The BlackBerry Q series could easily accommodate a physical trackpad just above the keyboard by moving the BlackBerry branding to the space under the keyboard. Coming from the Black Bold 9700/9780 to the BlackBerry Z10 to the BlackBerry Q5 has been an interesting adventure.

    Posted via the BlackBerry Q5 using CB10.
    12-21-13 09:24 AM
  10. Wiki Cydia's Avatar
    The same is happening to Apple now, iOS is getting stale, despite the update. Just that they have that fetish brand aura will keep them afloat.

    My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...
    Nope. BBRY's problem isn't that the competition passed them by; it's that the market deprioritized/shifted away from the things BBRY does well. Even today, I don't think anyone makes a better messaging device than BBRY, but messaging isn't as important as it used to be, and offerings on other platforms are sufficient to satisfy most users.
    Josh_Gooner and milo53 like this.
    12-21-13 11:26 AM
  11. m1a1mg's Avatar
    I've read a few of the "analyst's" responses to the ER and the jump in price. One very interesting approach was that JC is just cleaning up the company to make it more attractive for sale.

    Maybe I missed it, but he is still "interim", right?
    milo53 likes this.
    12-21-13 03:10 PM
  12. milo53's Avatar
    I agree entirely. Foxconn doesn't have a giant barrel of smartphone pixie dust lying around that it can sprinkle on this disaster. All this is about is accounting and corporate re-engineering which allows BBRY to jettison its handset division at the lowest possible cost to itself. For as long as I can remember, analysts were saying how the handset division has been a drag on BBRY's profitability so this move is a response to that.

    As for the future of BBRY handset. I again ask the question I originally posed which is: what can Foxconn develop that BBRY couldn't to make handset any more attractive as a division? In my mind, the issue wasn't the quality of the hardware's build (yes, they aren't perfect) but rather the awful disaster of an OS that BB10 represented. In other words, from my perspective people purchase iOS, Android, Windows Phone or BB10 devices first based on:
    1) cost (what can I afford);
    2) OS (which OS gives me what I am seeking == apps? security? entertainment?);
    3) hardware specs based on #1 and #2

    By jettisoning hardware, will BBRY make BB10 OS any more appealing to the consumers or to enterprise?

    The decline started with BBOS when consumers (including the so-called prosumers) defected to other OS's since BBOS did not give them the experience they were seeking. BB10 was supposed to address those concerns but miserably failed to do so. So hardware goes to Foxconn but what changes are being made to BB10 to make BB10 any more appealing than it is today? Given the pathetic sales figures, it is clear that BB10 appeals to a tiny niche within a small niche that is getting tinier by the quarter.
    Foxconn will control inventory and distribution. My question is, what if Foxconn makes 1million handsets, who pays for them? Who takes the loss, if they sell 200k? I would think, Blackberry would eat it, anyone have answer?
    12-21-13 04:50 PM
  13. sixpacker's Avatar
    I've read a few of the "analyst's" responses to the ER and the jump in price. One very interesting approach was that JC is just cleaning up the company to make it more attractive for sale.

    Maybe I missed it, but he is still "interim", right?
    He certainly emphasised the separation into 4 distinct business units. These were of course the ones they were desperately trying to find a buyer for. As time goes by it will easier to justify the sell off one or more of these units. I also personally doubt he's here for the long haul. He's doing the job he was brought in to do, and no doubt he will do it well.
    12-21-13 04:59 PM
  14. NYC10065's Avatar
    Foxconn will control inventory and distribution. My question is, what if Foxconn makes 1million handsets, who pays for them? Who takes the loss, if they sell 200k? I would think, Blackberry would eat it, anyone have answer?
    I can't imagine Foxconn -- which is probably the largest manufacturer of electronics -- from smartphones to tablets to televisions on the planet -- agreeing to something that leaves them potentially exposed to millions/billions in unsold inventory. They probably can more effectively respond to market dynamics than BBRY can.

    In the end, though, what does it matter when no one wants the product. The issue is not the hardware but the OS. Let's say that you loaded BB10 OS on the exact same hardware as the iPhone or Samsung Galaxy, would it sell any better than the Z10? Unless and until BBRY offers a product (both hardware and software) that consumers want, the corporate re-engineering is just a short-term manoeuvre designed to boost the share price.
    milo53 likes this.
    12-21-13 06:26 PM
  15. Roo Zilla's Avatar
    Does the 4 billion write down bring a tax break?

    Posted via CB10
    What's it matter? A tax deduction only occurs when you have positive income. I don't see positive income coming from BlackBerry in the foreseeable future.

    Anyway ,if BlackBerry ever does start to make money again, any realized capital losses can be carried forward for a number of years. I'm not sure how tax law works in Canada, but I presume it's around 5-10. Now, that's for "realized losses" not simply asset write down. It's like if you bought a ton of BBRY stock early in the year. You don't get a tax deduction on that loss until you actually sell the stock and "realize" its value. Works the same way for capital gains.
    12-22-13 03:24 AM
  16. TGR1's Avatar
    Is there a transcript of the conference call available? Apologies if it has been already posted in some thread already.
    12-22-13 01:24 PM
  17. blueberrymerry's Avatar
    Foxconn makes big profits from tiny margins on huge volumes. They produce for pretty much everyone nowadays. The BBRY-Foxconn deal means BBRY doesn't have to deal with smaller contract manufacturers who could terminate deals or raise prices if BBRY can't sell a bunch of phones... Foxconn comparably has huge economies of scale.

    That doesn't mean they'd be willing to sit on a warehouse full of Playbooks or Z10's. Nokia investors got decent value when the Devices and Services division was sold to Microsoft. BBRY investors don't get much out of this deal though.
    12-23-13 07:12 AM
  18. allengeorge's Avatar
    You should be able to listen to the BlackBerry investor call on their website: Investor Events - US
    12-28-13 06:12 PM
  19. allengeorge's Avatar
    I have no idea what I'd do if I were in John Chen's shoes. It's obvious that Android and iOS own the mobile market. It's unclear whether BlackBerry's traditional strengths (BBM, enterprise device management) are valuable any more. BB10, while good, doesn't offer a compelling hook that'll force users to switch. Problems like "one environment across all devices" are slowly getting addressed by Google (gmail, drive, google apps, Chrome, ChromeOS, Google Now, search personalization) and even Microsoft (Office365, SkyDrive).

    Maybe BlackBerry could offer the equivalent of the Google experience (centralized, shared profiles, a common "data space" in which all your files, emails, etc. lived) in a completely on-prem package with all the enterprise goodies like auditing, centralized management, etc. It would be even more interesting if you could tie BBM into it. Now, all communication can go completely through on-premise servers, and carriers are simply used as dumb pipes. You could automatically transcript BBM voice and video calls for regulatory and search purposes, etc. etc. Could be very interesting for privacy-sensitive corporations.

    This is something that Google wouldn't do, because it's just not in their DNA. They want to collect more data from you, want you hooked up to their services (where they can mine your behaviour), etc. This isn't in Apple's DNA either, because they've never really understood or cared about the enterprise space. Microsoft would be the competitor to watch for, because they have all the pieces to make this happen.

    A BlackBerry of that type would be much, much smaller, and more of a services than a handset company. They would not be in the consumer market anymore. But, maybe, given their DNA and the assets on hand that's the right play. Who knows.
    Admorris likes this.
    12-28-13 06:26 PM
94 ... 234

Similar Threads

  1. The Dark Knight Rises - Day 20 of BlackBerry's 25 Days of Gifts
    By CrackBerry News in forum CrackBerry.com News Discussion
    Replies: 1
    Last Post: 12-23-13, 09:03 PM
  2. BlackBerry Launches Enterprise Solutions Centres in India
    By CrackBerry News in forum CrackBerry.com News Discussion
    Replies: 0
    Last Post: 12-20-13, 05:10 AM
LINK TO POST COPIED TO CLIPBOARD