12-19-13 09:11 AM
67 123
tools
  1. BeautyEh's Avatar
    Thanks to the OP for this small dose of reality. Literally "killing" off the handset business would be grotesquely expensive. This is not to mention that the downsizing involved would effectively take BlackBerry from a 'billion' dollar corporation, to a million dollar one. Did Watsa have that in mind as a successful turn around?
    I feel strongly that there is a way to break even on a sustainable model with phones. They have to figure out how to build the other aspects of the business while offering devices as part (maybe a small part) of their overall portfolio.

    Posted via CB10
    12-14-13 02:09 PM
  2. app_Developer's Avatar
    I presume you answer both posts above.
    What I'm pointing out is the "dynamic" nature of these engagements. I was particularly thinking to suppliers' ones.
    But that's my point, it isn't really dynamic. Sometimes if you want a particular touchscreen with certain specs you have to commit to buying a large lot of them over some period of time. If that model you built around that screen is not successful, you eat the screens. If you can't accept those terms, then that screen factory would rather make screens for Apple.

    About the cost of devices, the previous post was intended to (try to) figure out what was a possible break even point. I was wondering about it considering the Jolla launch with a $399 device ... how's that they could while BlackBerry couldn't ?
    Because Jolla doesn't have tens of thousands of employees and a half a town worth of buildings that will all cost many hundreds of millions of dollars to get rid of.

    Because Jolla uses an OS based on Linux which means they didn't spend billions building a completely new OS from the kernel and drivers up. Even Qt was conveniently already running on Linux for them. And the off the shelf GPUs and other hardware they use already work with Linux and Qt very cleanly out of the box. Running the Android runtime on Linux is also trivial for them.

    I'm guessing they also buy components that are the same specs as more popular phones to get better terms from suppliers.

    In short, they behave as a small company which is easy for them since they actually are a small company.

    Again, I'm not saying BlackBerry can't be a small company again like they once were. I'm saying that the process of becoming a small company again will take a lot of time and a LOT of money, and make shareholders very, very angry. Jolla has a big advantage in that they are already a small company without suffering all of that.


    Sent from my iPhone 5S using Tapatalk
    12-14-13 03:12 PM
  3. Superfly_FR's Avatar
    I'm nowhere stating that hardware will pay all the bills ! I just pretend, while consensus seems to be that it is a cash drainer, that it can be at least break even. Notably bc R&D cost have been partially amortized already.

    Visit my BBM Channel !
    12-14-13 03:18 PM
  4. Roo Zilla's Avatar

    Say I've been wrong in my calculations, have to add marketing, promotion, incentives, whatever.
    Say, I've been wrong by a ratio of 2 for 1.
    Still, we then have a net profit after 5Mill devices

    That's so weird, I must be wrong ...
    Explain like if I was 10yo, please.
    Let's say a company pays $100 for widgets. They can only sell those widgets for $100. That means whatever expenses the company incurs in producing and selling those widgets are causing operational losses. Until the company can sell the widgets for more than they pay, the company will burn cash. Unless the company can either pay less for the widgets, or sell them for more, the losses will compound, eventually wiping out all their assets.

    Basically, that's BlackBerry's problem. The handsets cost BlackBerry about $250-300 including IP costs to make. That's marginal cost, excluding all sunk costs. They're having trouble selling them above those prices n sufficient quantities. That means their operations are draining cash, reflected each quarter in earnings.
    anon1727506 and JeepBB like this.
    12-14-13 06:06 PM
  5. Superfly_FR's Avatar
    Let's say a company pays $100 for widgets. They can only sell those widgets for $100. That means whatever expenses the company incurs in producing and selling those widgets are causing operational losses. Until the company can sell the widgets for more than they pay, the company will burn cash. Unless the company can either pay less for the widgets, or sell them for more, the losses will compound, eventually wiping out all their assets.

    Basically, that's BlackBerry's problem. The handsets cost BlackBerry about $250-300 including IP costs to make. That's marginal cost, excluding all sunk costs. They're having trouble selling them above those prices n sufficient quantities. That means their operations are draining cash, reflected each quarter in earnings.
    Agree.
    Therefore my $400 price against reality where current $600's for customers (edited: read direct sales) and $350's for ASP (edited: this is ASP for Carriers) would rather place an average in the $500's... at least it was the meaning of this "say" average price

    Visit my BBM Channel !
    Last edited by Superfly_FR; 12-15-13 at 11:21 AM.
    12-14-13 06:19 PM
  6. app_Developer's Avatar
    Agree.
    Therefore my $400 price against reality where current $600's for customers and $350's for ASP would rather place an average in the $500's... at least it was the meaning of this "say" average price
    I don't understand what you mean. You say the average selling price (ASP) is $350 but then you say it is in the $500's?


    Sent from my iPhone 5S using Tapatalk
    12-14-13 07:14 PM
  7. M65c02's Avatar
    The citi analyst has simply stated the obvious. (We've had this discussion since a year ago, heating up in May/June and tapering off since.)

    BBRY was/is a $6-7 stock w/o a takeover in 2013. This value was inflated 2x by the false promise of BB10 and, later, kept to $9-10 by Prem's offer. It was made clear (in June) that BBRY would collapse to ~$6 and drift to test under $5 early in 2014 with a collapse of the Prem indication of a purchase. Edit: ("The Devil you Know Scenario" or "Careful what you wish for" or "Follow History (of Tech Takedowns) and See the Light")

    BlackBerry has been in a severe negative cash generation position for most of a year. Without generation of free cash, BB will not survive. Make no mistake, Prem's BB will fight very hard to support share price but BBRY will slip into the abyss of sub $5 pricing in early 2014. That die was forecast and cast long ago when also the institutions abandoned and BBRY trading volume dwindled. Edit: (Again, just historical trading patterns for a tech co. in remission repeating itself.)

    As per the hardware, some good attempts (ABOVE) at a cost accounting. Just know that the BE has to be in the 20mm+/annum over 4yrs, 5yrs max. The reason that one can freeze the runoff costs and mostly isolate from revenues is that an inherent cost component of a smart phone is not only the cost of current operations plus amortized development, plus amortized future commitments (e.g., wty). There is also a need to integrate the cost of future phone development in today's phones. This may be viewed as a fictional cost from a GAAP acctg perspective. However, it is a cost that leans on the free cash evaluation. This means that BB must generate free cash constantly from today's phones to fund development of tomorrow's tecnology. This is true even as such expenditure of cash will be accrued as expenses
    against the next gen of phone.


    BlackBerry, at present, has no generation of free cash and it appears will not be able to properly fund today (or from today's revenues) its need to have another great phone in the pipeline. Therefore, a hypothetical shutdown would exclude some (maybe most in BB's case and industry) of the future revs against future liabilities.

    Back with more later....but suffice it to say that BBRY is losing value (and has been since circa June) daily and with every sale of a BB10 given current market conditions. Cutting expenses may give an appearance of (and be spun as) clean-up but more than likely it is eliminating the progress of a competitive next generation of BB phones (and further enhanced software).

    Edit: Therefore, the Citi analyst's projection of BBRY testing $4 conveys mores of an old scenario equally projected by a College Senior in Finance as a million dollar analyst. And, it follows that BB cannot stake its future on loss leaders that were intended to represent BB's entire future line of hardware/phones. .... Until/unless BB develops a strategy that makes any sense, we should assume it is being positioned by Prem for resale....and that for early 2014 a valuation in the $4-5 range given the true nature of BB's net asset position appears credible even as the BBRY share price may, on occasion, temporarily claw back temporarily some lost mkt. cap.

    [Note: For you youngsters and/or you haven't picked up on this comment prior: THIS IS EXACTLY THE DILEMMA of or PATTERN followed by tech giants DEC, PRIME, DG, Wang, etc., etc. Although some had the best/most advanced hardware, they still couldn't muster enough buyers given their stubborn insistence of insisting they knew consumer demand for their products better than the actual consumer. Each ignored the manner in which (chip) tech was evolving and how tech would be used in the future, instead sticking with their same old ... albeit once very profitable ... mindsets until it was too late. In their final years, virtually all were dependent upon Govt contracts (ie., charity) .... sound familiar?!?!]


    Posted via CB10
    Last edited by M65c02; 12-15-13 at 10:41 AM. Reason: Scrivener errors and added last 2 paragraphs
    kevinnugent, JeepBB and BeautyEh like this.
    12-14-13 08:04 PM
  8. BeautyEh's Avatar
    The citi analyst has simply stated the obvious. (We've had this discussion since a year ago, heating up in May/June and tapering off since.

    BBRY was/is a $6-7 stock w/o a takeover On 2013. This value was inflated 2x by the false promise of BB10 and, later, kept 9-10 by Prem's offer. It was made clear that BBRY would collapse to ~$6 and drift to test under $5 early in 2014 with a collapse of the Prem indication of a purchase.

    BlackBerry has been in a severe negative cash generation position for most of a year. Without generation if free cash, BB will not survive. Make no mistake, Prem's BB will fight very hard ti support share price but BBRY will slip into the abyss of sub $5 pricing in early 2014. That die was forecast and cast long ago when also the institutions abandoned and BBRY trading volume dwindled. (Just history repeating itself.)

    As per the hardware, some good attempts at a cost accounting. Just know that the BE has to be in the 20mm+/annum over 4yrs, 5yrs max. The reason that one can freeze the runoff costs and mostly isolate from revenues is that an inherent cost component of a smart phone is not only the cost of current operations plus amortized development, plus amortized future commitments (eg, wty). There is a need to integrate the cost of future phone development in today's phones. This may be viewed as a fictional cost from GAAP acctg perspective. However, it is a cost that leans on the free cash evaluation. This means that BB must generate free cash constantly from today's phones to fund development of tomorrow's tecnology. This us true even as such expenditure of cash will be accrued as expenses
    against the next gen of phone.

    BlackBerry, at present, has no generation of free cash and it appears will not be able to properly fund today its need to have another great phone in the pipeline. Therefore, a hypothetical shutdown would exclude some (maybe most in BB's case) of the future revs against future liabilities.

    Back with more later....but suffice it to say that BBRY is losing value (and has been since circa June) with every sale of a BB10 given current market conditions.


    Posted via CB10
    Very interesting. Good info. How would you weigh their options then, when contrasted with the OP's point, namely that "killing" off the hardware business anytime soon would be a nightmare expense? The level of downsizing involved, to go from 7600 employees to maybe 1000 or less, is enormous, and would be expensive in and of itself. Curious for your thoughts on that aspect as well?
    I think there must be some way to go forward and create a sustainable model that involves hardware, but obviously they are in a tough spot.

    Posted via CB10
    Superfly_FR likes this.
    12-15-13 03:18 AM
  9. Superfly_FR's Avatar
    I don't understand what you mean. You say the average selling price (ASP) is $350 but then you say it is in the $500's?


    Sent from my iPhone 5S using Tapatalk
    ASP is price for carriers (~ bulk price).
    12-15-13 05:01 AM
  10. app_Developer's Avatar
    ASP is price for carriers (~ bulk price).
    Actually ASP is average sales price. You can't redefine the terms to make the accounting look better.

    I think I understand what you're saying, though. which is that you believe if BB sells direct they can make a higher gross margin. Do they even sell direct at all now? I thought their online sales were actually through a third party reseller. In any case, a 50% gross margin seems unbelievably optimistic to me.


    Sent from my iPhone 5S using Tapatalk
    JeepBB and sati01 like this.
    12-15-13 07:42 AM
  11. TGR1's Avatar
    In any case, a 50% gross margin seems unbelievably optimistic to me.
    That's wildly unrealistic. 50% is iPhone level and beyond, which is itself a complete anomaly in handsets. I believe most phones are around the 20%ish level.
    12-15-13 08:10 AM
  12. slickvguy's Avatar
    The citi analyst has simply stated the obvious.
    Was he also stating the obvious when he raised the price target to $22 not that many months ago? Guess he really didn't know what he was talking about. So now he does? Maybe.

    My bottom line on all analysts is to ignore them completely, except to fade them when there is overwhelming consensus. Aapl at $700 had nothing but bullish analysts and higher targets. Went under $400. BBY had overwhelming bearish analysts and lower price targets at $11. It's at $40+. Fading them doesn't work every time though. Sometimes even the analysts seem to get it right. How could they not? Randomness would dictate that they do. What's seemingly strange is how they get a disproportionate number of wrong calls versus a coin toss. That's because they almost always simply change their opinions to match what is currently happening with the stock, and add or subtract a bit more to the current price and ridiculously refer to it as a target.

    How incredibly rare for an analyst to make a prediction against current consensus, go out on a limb and predict a large move in the opposite direction, and prove to be right. Lol. That tells you all you need to know about so called analysts.

    As for BlackBerry...time will tell.
    12-15-13 09:56 AM
  13. Superfly_FR's Avatar
    Actually ASP is average sales price. You can't redefine the terms to make the accounting look better.

    I think I understand what you're saying, though. which is that you believe if BB sells direct they can make a higher gross margin. Do they even sell direct at all now? I thought their online sales were actually through a third party reseller. In any case, a 50% gross margin seems unbelievably optimistic to me.


    Sent from my iPhone 5S using Tapatalk
    Sorry for the ASP (= limited to carrier sale price) tag, I'm referring to numerous articles of Chris, where this terminology has been used, I believe in purpose. Because until recently, BB did only indirect sales.
    There's no trick to make accounting look better, my sentence wouldn't have any sense - as you pointed out - if it wasn't my initial intention.

    And yes, the "consumer" sale price would be direct sales, as BB started on several localized websites last months.

    I'll edit former post to clear this possible error.
    Last edited by Superfly_FR; 12-15-13 at 11:26 AM.
    12-15-13 10:46 AM
  14. Superfly_FR's Avatar
    That's wildly unrealistic. 50% is iPhone level and beyond, which is itself a complete anomaly in handsets. I believe most phones are around the 20%ish level.
    Is it, really ?

    A breakdown of the first BlackBerry 10 device shows that the Z10's costs are competitive with Apple's iPhone.
    The Z10 was pieced out and together all the components ring in at a total of $154 when all is said and done. [...]

    • Processor $23.50
    • Touchscreen $26.50
    • Cameras $15.00
    • Flash storage (16GB) $9.00
    • Other components $ 21.00
    • Remaining major materials $ 59.00
    What it costs to make Blackberry's Z10 - Video - Technology
    Here's what the BlackBerry Z10 costs to make | CrackBerry.com

    edit/precisions : I'm not claiming the analysis of dismantling cost is false, just that it is pointless. Only trying to put some figures and substance to back my reasoning up.

    edit(2) : may have just stated "they're not going to stop hardware anytime soon and nowhere because of this BGR spit". Really, easier. And I believe, for many, more efficient
    Last edited by Superfly_FR; 12-15-13 at 11:28 AM.
    12-15-13 10:59 AM
  15. TGR1's Avatar
    Is it, really ?


    What it costs to make Blackberry's Z10 - Video - Technology
    Here's what the BlackBerry Z10 costs to make | CrackBerry.com

    edit/precisions : I'm not claiming the analysis of dismantling cost is false, just that it is pointless. Only trying to put some figures and substance to back my reasoning up.

    edit(2) : may have just stated "they're not going to stop hardware anytime soon and nowhere because of this BGR spit". Really, easier. And I believe, for many, more efficient
    I looked around a bit and RIM/BBRY handsets typically have been reported to have had higher margins than other vendors ; in the 30%+ region. Of course, it may well be that BBRY initially priced the handsets high enough to equate to 50% GM, if they sold. But that would have been a very strange strategic decision, I think.
    Superfly_FR likes this.
    12-15-13 12:11 PM
  16. Superfly_FR's Avatar
    Of course, it may well be that BBRY initially priced the handsets high enough to equate to 50% GM, if they sold. But that would have been a very strange strategic decision, I think.
    My point is to state (given my 2:1 error margin in my OP) that they can now sell devices at a lower price and not lose money due to R&D amortization. I hear the mandatory investment costs for future devices, but I believe it is marginal if you compare it to a wide range (Z10, Q10, Q5 and partially Z30) one. May worth a 10-15% as recurrent structural costs IMHO.

    Please note, the deeper we go in details, the bigger I'm likely going to make estimations/calculations error, since we have no material but a wet finger to estimate weights, % or costs ... Therefore I'll probably not go deeper, I'm already quite on the guessing
    12-15-13 01:09 PM
  17. Loc22's Avatar
    Have you noticed that all the BlackBerry devices are made in Mexico whereas all the iPhones are being manufactured in China which can be much cheaper.

    Posted via CB10
    12-15-13 03:03 PM
  18. TGR1's Avatar
    My point is to state (given my 2:1 error margin in my OP) that they can now sell devices at a lower price and not lose money due to R&D amortization. I hear the mandatory investment costs for future devices, but I believe it is marginal if you compare it to a wide range (Z10, Q10, Q5 and partially Z30) one. May worth a 10-15% as recurrent structural costs IMHO.

    Please note, the deeper we go in details, the bigger I'm likely going to make estimations/calculations error, since we have no material but a wet finger to estimate weights, % or costs ... Therefore I'll probably not go deeper, I'm already quite on the guessing
    True, a lot of this is guesswork but is a good discussion.

    As long as BBRY doesn't need to do any retooling to accommodate case changes, etc., I would agree on the amortizing of R&D costs. But they have four unique models to support and fairly small volumes of each so anything they might have recouped may be lost in increased component and manufacturing costs. It's like that saying "the rich get richer"? All the benefits aren't for players such as BBRY.
    Superfly_FR likes this.
    12-15-13 03:21 PM
  19. m1a1mg's Avatar
    I take no issue with what Super attempts to determine, because it's irrelevant. If BB can't sell phones, at some point, they reach the point where they pay out more than they take in. Period.

    I know it's a glass half full/half empty discussion, but I just don't see the miracle moment where customers start flocking to BB.
    JeepBB and kevinnugent like this.
    12-15-13 04:09 PM
  20. Superfly_FR's Avatar
    Have you noticed that all the BlackBerry devices are made in Mexico whereas all the iPhones are being manufactured in China which can be much cheaper.

    Posted via CB10
    Absolutely, therefore I multiplied the man power cost by 3 in my estimation ...

    I take no issue with what Super attempts to determine, because it's irrelevant. If BB can't sell phones, at some point, they reach the point where they pay out more than they take in. Period.
    I know it's a glass half full/half empty discussion, but I just don't see the miracle moment where customers start flocking to BB.
    If BB can't sell phone, then my calculation can't do anything they just lose every penny (and more) they threw at it. Of course. But even with a big error margin (remember I divided my expectations / multiplied the total number of devices by 2, that's a 100% margin error!). The number I come to is the one we currently know for a full year: 5 Mill devices, with a (global ) ASP of $400. And that current sales level is qualified as dismal!

    Should the number be10Mill, I'd say they will probably not make it 100% and lose (some) money on hardware. But this target sounds to me as achievable; promotion and packages will be the key for Z/Q10 and Q5 in enterprises, while keeping Z10 price in the $400s w/o contract (direct sales) will probably place it in the range of devices under $10 with 2 years subscriptions plans.

    But even in this scenario, I stand convinced that it is a price to pay to keep BlackBerry DNA intact. The whole supply chain restructuring that has been done during the last years (at cost) made this possible. Because build costs are low ("compares to iphone"). Now it's up to the marketing to decide whether they want more volume with lower prices (and image deprecation) or higher prices with lower volumes (brand recognition deprecation). That's a mix they have to do, depending on their goal for the very near future.

    Last era was "building a future", with a long term vision, and no complacency.
    Current is "now get the money back, and fast", we'll soon to see what's the size of the gun they have.
    Last edited by Superfly_FR; 12-15-13 at 05:00 PM.
    12-15-13 04:29 PM
  21. Roo Zilla's Avatar
    Have you noticed that all the BlackBerry devices are made in Mexico whereas all the iPhones are being manufactured in China which can be much cheaper.

    Posted via CB10
    Nonsense. Per capita GDP in China is about $6500 or so. In Mexico it's about $11,000. Since assembly costs on a smartphone typically comprise about 10% of BOM, you're talking a labor cost differential of about $5-6. Not very significant.
    12-15-13 05:47 PM
  22. Roo Zilla's Avatar
    If BB can't sell phone, then my calculation can't do anything they just lose every penny (and more) they threw at it. Of course. But even with a big error margin (remember I divided my expectations / multiplied the total number of devices by 2, that's a 100% margin error!). The number I come to is the one we currently know for a full year: 5 Mill devices, with a (global ) ASP of $400. And that current sales level is qualified as dismal!
    There is no way BlackBerry is selling an ASP of $400.
    12-15-13 05:50 PM
  23. CairnsRock's Avatar
    Back to the original point of "bbry staying in the handset business because they can't afford to get out of it"
    Also per the above posts where they have no demand for the current phones and can't afford to make new ones.

    So, staying in the handset business must mean it's an exit strategy to keep some demand alive until they can clear the current inventory. Playbook all over again.

    Also, staying in a market because you have no choice is in itself a going out of business scenario. A drastically diminished work force, zero morale, best talent already gone. The remainder actively trying to bail. Not exactly a bright and positive environment.

    Kind of like staying in a marriage because you can't afford to split up. Not a marriage made in heaven.

    There is also a lot of discussion about some future killer phones that are going to do a Hail Mary pass. But the fact is that the bb10 operating system failed to attract users and bbry is stuck with that.
    Last edited by CairnsRock; 12-15-13 at 06:21 PM.
    12-15-13 05:59 PM
  24. M65c02's Avatar
    Very interesting. Good info.

    How would you weigh their options then, when contrasted with the OP's point, namely that "killing" off the hardware business anytime soon would be a nightmare expense? The level of downsizing involved, to go from 7600 employees to maybe 1000 or less, is enormous, and would be expensive in and of itself. Curious for your thoughts on that aspect as well?

    I think there must be some way to go forward and create a sustainable model that involves hardware, but obviously they are in a tough spot.
    [Note: You might want to re-read, and especially the last couple paragraphs, my post above.]

    Somewhat Ironic, I agree with (what I believe to be) OP’s view although perhaps for different reasons. It would indeed be tremendously expensive to cut this many employees, or even half that number, and remain the Blackberry that produces both software and phones. Surely, such cuts would be extending into the muscle and bone of BB (part of OP’s point) and cannot be accounted for as clearing just corp. fat/waste. And, as my post above points out, a true cost accounting is much more advanced than simply looking at a current BB10 phone in a vacuum … even as a few posters provide some otherwise good C/A evaluations.

    Understanding the Basics: At the risk of being repetitious, it has always been safe to say that BB must sell a minimum of 20+mm BB10 phones the first year (as well as a couple years thereafter) or they would bleed cash as the promise of BB10 failed. Obviously, the reason the first year is so important (for a state of the art phone) is because the average half life of a phone is 2 years, or less. A credible smart phone mfr. challenging the “BIGS” with the latest OS innovations must introduce new devices at least every 2yrs or risk losing their user base. This process takes money and, as explained, the cash flows from the current smart phone feed the research for the next ….just as the “usership” of one generation establishes the base for new sales of the next generation of a mfr’s phone. BB has not and will never sell 20mm BB10 (even at a loss), has no material OS10 following (@0% of the mkt), and obviously has no answer with another unique concept in the pipeline.

    If a company slows (or stops) new R&D for its next smart phone (or software), as BB clearly has done now as well as five years ago, it can bring a short-term, artificial boost to net profits . In the same manner cutting payroll, of course, is an immediate injection to the bottom line. Sure, the analysts may also love it in the short-term, a small support (or even spike) in share price may occur, but the real impact comes in a 2-4 years when without (or late with) a new product the user base has dwindled, revenues/profits shrivel and the share price continues to slide as analysts change from sheep to wolves . Indeed, BBRY was propped for 3-4yrs by the illusion of earnings that foretold a good future when, in fact, they had simply resorted to the age-old trick of cutting expenses, not expending to plan for a future, and bilking runoff on aging products/technology. Okay, all so very, very logical to understand and supported by the history of hundreds of corp. failures, yet emotions sometimes allow the simplicity of these basic business concepts to be overlooked.

    Now more specific to poster’s point/question: BB most surely has to retool and remake its entire image to survive and grow. At this time, I’m not sure that BB can sustain both state-of-the-art smart phone software and a top engineered phone. If BB had introduced the phones and current release of OS10 in Feb/March, perhaps they would have had a chance. But taking most of a year to clean up BB10, our Blackberry, again, is behind the next step in the smart phone race.

    One solution for BB might be to get its software running on another phone (as previously bantered in CB). BB might engage in an enterprise/partnership with a 3rd party mfr whereby such company makes phones under both the BB and mfr. name. The models, both running OS10, might have a few design differences between the one labeled BB and the other bearing the mfr’s name. This company might be captive to BB but probably would be free to make a phone for Droid/other software….which may have residual benefits for BB marketing. In relinquishing (i.e., selling off or licensing) some of its mfg control over the handsets, it can relieve some financial burden. [Note: The structure of this “partnership” might be in the form of simply a two party contractual exclusive w/o BB ownership, BB majority/minority ownership in the co., BB assuming risk for a minimum volume, and/or BB throwing in legacy production as an incentive/kicker.]

    Now finding the right company for this strategy is the next question/comment that requires answer. I have a couple ideas but don’t have the proper inside information: No easy task to be sure. It needs to be a company that would provide some marketing synergism (or at least positive mystique) in order to dilute some of the poor BB smart phone image. Tall order I know!!

    What I will say in conclusion is that poster’s comment as to BB being in a tough spot is quite the understatement. It would/will indeed be a very expensive proposition for BB to move things out just as it would be to continue within BB mfr of (BB10) handsets at a loss. ... I'm not sure that Chen has the background to engineer a retooling, rather only a continued shoring up of current assets and cutting expenses to keep losses low while attempting to attract a buyer/partner favorable to Prem's financial commitment.
    Last edited by M65c02; 12-19-13 at 08:57 AM.
    JeepBB and BeautyEh like this.
    12-16-13 10:00 AM
  25. M65c02's Avatar
    I take no issue with what Super attempts to determine, because it's irrelevant. If BB can't sell phones, at some point, they reach the point where they pay out more than they take in. Period.

    I know it's a glass half full/half empty discussion, but I just don't see the miracle moment where customers start flocking to BB.
    Nonsense. Per capita GDP in China is about $6500 or so. In Mexico it's about $11,000. Since assembly costs on a smartphone typically comprise about 10% of BOM, you're talking a labor cost differential of about $5-6. Not very significant.
    m1a1mg is correct: These are mental gymnastics until BB can sell its new phones. RooZilla is also correct in that labor really isn't a big cost component and therefore China vs. MX is mostly irrelevant. To locate on the border of TX/MX might have some nominal advantages but shipping costs for a small volume/weight device are mostly irrelevant too. There are some treaty benefits to being in Mexico vs. importing from China, but this too does not help the (extremely) low unit volume BB in a favorable cost accounting comparison with China. [Note: RooZilla, you might want to look to median income rather than a true average for your comparisons if/when the labor % are otherwise material.]
    Last edited by M65c02; 12-19-13 at 09:02 AM.
    app_Developer and BeautyEh like this.
    12-16-13 10:20 AM
67 123

Similar Threads

  1. Can't Format 64gb SD Card
    By lcgoldman in forum BlackBerry 10 OS
    Replies: 12
    Last Post: 11-14-14, 07:03 PM
  2. I Love BlackBerry!
    By Skatophilia in forum General BlackBerry Discussion
    Replies: 30
    Last Post: 12-14-13, 07:38 PM
  3. Blackberry os 10 root to android os
    By kaptanp3 in forum BlackBerry 10 OS
    Replies: 9
    Last Post: 12-13-13, 07:40 AM
  4. BlackBerry Z10 OS 10.2.0.424 SMS BUG!
    By berrydisappointed in forum BlackBerry Z10
    Replies: 10
    Last Post: 12-13-13, 03:42 AM
LINK TO POST COPIED TO CLIPBOARD