1. BACK-2-BLACK's Avatar
    Hi all,

    Wall Street Journal Article today:

    BlackBerrys New Plan Could Bear Fruit
    Attempt at Revival Is Showing Signs of Life

    LINK: BlackBerry?s New Plan Could Bear Fruit -- Heard on the Street - WSJ

    "Having been thoroughly crushed in smartphones, it is amazing that BlackBerry BB.T -2.14% seems to have any juice left.

    At least, investors seem to think so. It has been a year since BlackBerry switched out its senior managementfor the second timeand effectively gave up on the consumer smartphone business. In that time, the company has slashed costs to cope with diminished revenue while also working to build up new mobile software offerings aimed at corporations. Despite the new business being in early stages, BlackBerry stock has leapt more than 85% in that time.

    That would seem to set it up for another spectacular fall. But the companys new goals are more grounded.

    While it is still building a small number of new devices to serve a niche crowd of loyalists, BlackBerrys main focus now lies in software. Last week, it launched its new BES 12 platform which is to be the linchpin for a suite of mobile services designed for business users that works across all devices, including those from BlackBerrys competitors.

    This initiative is already showing traction: BlackBerry says it has about 5.1 million licenses signed up for a program that allows corporate users to try the BES platform for free until the end of January. That is up 50% from what the company had just two months prior. BlackBerry still faces the burden of converting these into paying customers when the time comes, thoughand the stakes are high.

    The company made $2.7 billion in high-margin revenue from service activation fees in the fiscal year ended March 1. Chief Executive John Chen said last week that this number is expected to slide to about $1.6 billion for the current fiscal year, and plunge to the $800 million range in fiscal 2016.

    BlackBerry has targeted its mobile software business to grow to about $500 million in annual revenue by fiscal 2016, so it wont be anywhere close to offsetting the decline in service fees. The companys niche handset business may help fill that gap: Analysts see revenue for it to still be roughly $2 billion in fiscal 2016, down from $3.8 billion in fiscal 2014. And BlackBerry is adding new services to the BES 12 platform to grow average revenue per user.

    BlackBerrys brand still resonates with corporate-technology executives, so this plan is plausible. But the hard fact remains that the company will be getting a lot smaller before it can get biggera risky, even if ultimately necessary, transition. That, along with BlackBerrys turbulent history, could mean the stocks sharp run-up of late gives investors pause.

    The stocks saving grace, though, is that it was coming off a low base, trading at less than half book value when Mr. Chen took over. It now trades at about 1.6 times forward sales. Clearly, that implies some sort of turnaround already being priced in. Even so, it is low compared with mobile software rival MobileIron at 4.5 times.

    So there may still be further gains for BlackBerry ahead, with the company finally making the right kind of moves."
    11-17-14 04:54 PM
  2. Prem WatsApp's Avatar
    MobileIron's sales are small, aren't they?

    Can anyone make sense of the numbers...?

    ? ? ? Passposted via CB Chen ? ? ?
    11-18-14 01:50 AM

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