BB - BlackBerry

[beerbaron]

All I wanted to point was a good deal for a good tablet. Now it's a fight between Peter, Smazz and others. I'm long RIM but nobody can argue that a 5% margin tablet is a good thing for RIM. On the other end RIM is a neat toy for 199$.

 

BeerBaron

[Green King]

All I wanted to point was a good deal for a good tablet. Now it's a fight between Peter, Smazz and others. I'm long RIM but nobody can argue that a 5% margin tablet is a good thing for RIM. On the other end RIM is a neat toy for 199$.

 

BeerBaron

 

Where did you get the 5% from ?

[beerbaron]

All I wanted to point was a good deal for a good tablet. Now it's a fight between Peter, Smazz and others. I'm long RIM but nobody can argue that a 5% margin tablet is a good thing for RIM. On the other end RIM is a neat toy for 199$.

 

BeerBaron

 

Where did you get the 5% from ?

 

Nowhere, I just figured that at the price they are selling they are probably losing money. 5% gross margin seemed like the lowest a management would go before discontinuing a product.

 

BeerBaron

 

[Liberty]

Hey Liberty,

your comments would carry weight ONLY if you would have spouted off earlier when CEO stooge was puking out his non sense. Now its falling on deaf ears.

 

I'm not sure what this means.

 

I could ask you and he the same thing:

If you are not betting long or short on this company why the affection for this thread?

I say just to cause shit.

 

I'm in this thread, as well as the MSFT, GOOG, and AAPL threads because I am interested in this space (not that I have to justify my interest to you). I used to be more active in all of those when I was a GOOG shareholder, but after making 30% in one month and selling to move into something that was more promising, I haven't been as involved here, but I like to keep an eye on what's going on in that area of tech. I am definitely not here to "cause shit", maybe you are just projecting.

 

Sorry, if you did your homework  you will know ive been on this board for a long time and have never made posts like this person before he came in here with non -info type stuff.

 

Is this a kind of appeal to authority? How long you've been around has nothing to do with what I've been saying.

 

Maybe you guys have some special bond - who knows.  Your apology on his behalf a bit ago had our heads shaking.

 

You really go all out ad hominem, don't you? I guess your attack only works if you don't care about facts. I've already addressed this, and I'm sure you've seen it since it's in the thread you monitor most closely:

 

http://www.cornerofberkshireandfairfax.ca/forum/index.php?topic=3603" data-ipsquote-contentclass="forums_Topic" 59998#msg59998

[Uccmal]

We might all want to consider why RIM remains in the business they are in, & where their real value proposition probably lies. Message encryption so robust - that nations effectively have to ask them for the encryption key.

 

Why sell to the masses based on price & ‘coolness’ - when you could sell proven secure communication directly to governments & get out of retail entirely. The ultimate ‘cool’ blackberry - price insensitive, government protection, etc – & one hell of a moat.

 

SD

The voice of reason.  Thankyou.  This is why I question managments judgement.  They could run separate divsions or even separate companies with separate devices, or at least differently named.  They have compromised their secure reputation by going into social media. 

 

Losses on the playbook, ex R&D, are likely 50/unit * 1 million = 50 million.  Since R&D crosses over to future phones it can be justified elsewhere.  I doubt they will discontinue the playbook.  i just think they had no choice and Ultimately ipad will come down in price or Aapl will keep it high end and accept lower revenue.  Alot of people in this space appear to buy on price.  Playbooks are sold out, Hp sold out their unit. 

[Smazz]

Hey Liberty,

your comments would carry weight ONLY if you would have spouted off earlier when CEO stooge was puking out his non sense. Now its falling on deaf ears.

 

I'm not sure what this means.

 

That says it all there.

 

Anyway, if you hadnt lumped my name in with that troll I wouldnt have a had an issue with you.

 

 

[SharperDingaan]

We also might want to consider why they are still not private, as all they need do is issue a convertible bond to take the public equity out. Convert your stake, or get out – your choice.

 

Choose to play a different game. No more explaining to analysts, no more media frenzy, no more option driven price speculation, no more SEC reporting. Short circuit the death spiral, calm the place down, & get on with business. No story.

 

SD

 

[Uccmal]

Article from Barrons

 

http://online.barrons.com/article/SB50001424052748704677404577044493464420820.html?mod=BOL_hpp_oe

 

Justication on an upgrade

[Uccmal]

Article about Jakarta store opening and plans for 1 dozen more stores in Indonesia.

 

Indonesia population nearly 250 million.  Economic growth rate 5-6%.  Us growth rate near zero.

 

http://www.theberryfix.com/rim-has-plans-to-open-more-blackberry-lifestyle-stores-across-indonesia

 

 

[Uccmal]

Uk users surpasses 8 million last week sometime:

 

http://gizmaestro.com/16/11/2011/technology/blackberry-reaches-8-million-users-in-uk/

[Uccmal]

Playbook lineups in Canada:

 

Occurred to me that higher memory devices may still make money.  Getting device into more hands will create a virtuous circle. 

 

http://blogs.vancouversun.com/2011/11/18/playbook-buyers-line-up-as-prices-slashed-for-rims-tablet-computer/

 

These are people who wont be Galaxy or Ipad customers for a couple of years now.

[Uccmal]

I guess not just Apple has software problems when they bring out a new device: 

 

http://crackberry.com/rim-confirms-issue-blackberry-bold-9900-9930-working-fix-software-update

[beerbaron]

Playbook lineups in Canada:

 

Occurred to me that higher memory devices may still make money.  Getting device into more hands will create a virtuous circle. 

 

http://blogs.vancouversun.com/2011/11/18/playbook-buyers-line-up-as-prices-slashed-for-rims-tablet-computer/

 

These are people who wont be Galaxy or Ipad customers for a couple of years now.

 

The tablet world is now doomed to be a crappy business. It has became a price game, which is the worst place to be competing. I'm not sure if anybody is going to win long term on the hardware side.

[Smazz]

Playbook lineups in Canada:

 

Occurred to me that higher memory devices may still make money.  Getting device into more hands will create a virtuous circle. 

 

http://blogs.vancouversun.com/2011/11/18/playbook-buyers-line-up-as-prices-slashed-for-rims-tablet-computer/

 

These are people who wont be Galaxy or Ipad customers for a couple of years now.

Al does it not surprise you when the same people who think Amazon has a great strategy buy almost giving away their products to entrench sales in ancillary revenue yet when RIM does it it is a terrible idea?

The funny thing is RIM didnt really spend much extra on their playbook vs phones. Its alot of the same technology while Amazon had to buy the whole shebangs. Many believe the BBX will be a bridge between Tablet and Phone removing the need for what we know now as a current stand alone  tablet.

[beerbaron]

Playbook lineups in Canada:

 

Occurred to me that higher memory devices may still make money.  Getting device into more hands will create a virtuous circle. 

 

http://blogs.vancouversun.com/2011/11/18/playbook-buyers-line-up-as-prices-slashed-for-rims-tablet-computer/

 

These are people who wont be Galaxy or Ipad customers for a couple of years now.

Al does it not surprise you when the same people who think Amazon has a great strategy buy almost giving away their products to entrench sales in ancillary revenue yet when RIM does it it is a terrible idea?

The funny thing is RIM didnt really spend much extra on their playbook vs phones. Its alot of the same technology while Amazon had to buy the whole shebangs. Many believe the BBX will be a bridge between Tablet and Phone removing the need for what we know now as a current stand alone  tablet.

 

I was thinking exactly the same thing. BB gets bashed for selling they PB at a loss but Amazon has a great strategy doing the same thing.

 

In my own perspective, it's rarely a good idea to sell products at a loss. Might it be Nortel, Amazon or BlackBerry top line growth is worthless without the bottom line following.

 

BeerBaron

[DCG]

I was thinking exactly the same thing. BB gets bashed for selling they PB at a loss but Amazon has a great strategy doing the same thing.

 

Amazon is selling razors to make money on razor blades. RIMM is selling razors with no blades to sell.

[given2invest]

I was thinking exactly the same thing. BB gets bashed for selling they PB at a loss but Amazon has a great strategy doing the same thing.

 

Amazon is selling razors to make money on razor blades. RIMM is selling razors with no blades to sell.

 

That's pretty much the problem.  However, my bet is RIMM is killing the playbook and this is the way for them to dump the inventory ala HPQ

[Liberty]

If they keep the playbook, if I was them I'd worry that I've damaged my pricing power and it will be very hard to get it back. Once you discount your product by $300 (or allow retailers to do it with your permission), bringing the price back up will be very difficult (who will want to pay $500-600 for something that sold for $200-300 brand new?). That's one thing that Apple understands very well; you'll almost never find big discounts, and over time they keep their prices very stable, because it's WAY harder to rise prices than to lower them.

 

That's one factor that makes me think that they are thinking of dumping the playbook. They must know how pricing works...

[given2invest]

If they keep the playbook, if I was them I'd worry that I've damaged my pricing power and it will be very hard to get it back. Once you discount your product by $300 (or allow retailers to do it with your permission), bringing the price back up will be very difficult (who will want to pay $500-600 for something that sold for $200-300 brand new?). That's one thing that Apple understands very well; you'll almost never find big discounts, and over time they keep their prices very stable, because it's WAY harder to rise prices than to lower them.

 

That's one factor that makes me think that they are thinking of dumping the playbook. They must know how pricing works...

 

correct

[Uccmal]

Or, keeping in mind that the QNX or BBX Os is going to be cross platform.  Perhaps a whole new unit is on its way and they want to clear this inventory at better than zero.  If they bought out a new unit they would be saddled with the whole inventory.

 

They have expended a huge amount of effort to get developers onto the BBX/QNX platform.  There is more than one factor at work.  By having expanded the ecosystem and made is cross platform developers now will want to develop for the playbook.  And if Existing developers dont want to do it I am sure they can induce thousands of Indians, Brazilians, and Indonesians to take up the task.  The cheap playbook now makes this possible for more people.

 

Re: the razorblade analogy - are not apps, music, BES, Rimms version of razorblades?  They can take more margin from developers, especially if they induce start ups in their growing markets. 

 

 

[Uccmal]

Btw, i have no argument with Tablets being a commodity.  Apple is probably the only company that will ever make money on the actual device.  The speed of commoditization this time around has been faster than ever.  A company has to make money on these devices by other means, as per Amazon, or Apple. 

[S2S]

Re: the razorblade analogy - are not apps, music, BES, Rimms version of razorblades?  They can take more margin from developers, especially if they induce start ups in their growing markets.

 

Not really. AAPL sells substantially more apps than RIMM (by about 10x, est. $2.9B vs. $279M in 2010 http://bit.ly/tpEKI4) - and that's not counting music sales, in which iTunes is the runaway leader globally. Yet it's never a big money maker (relatively, vs. hardware sales) for AAPL.

 

Maynard Um–UBS

We have seen a number of industry revenue forecasts for applications and just given kind of the expected explosive growth there I am just wondering if that is still a break-evenish type of business as you look forward over the next couple of years?…

[Apple CFO] Peter Oppenheimer

…Regarding the App Store and the iTunes stores, we are running those a bit over break even and that hasn’t changed. We are very excited to be providing our developers with a fabulous opportunity and we think that is helping us a lot with the iPhone and the iPod touch platform.

http://dthin.gs/uN0LWj

 

But here's why the razorblade analogy might work for Amazon: they have other things (ie clothes, kitchenware) to sell too

 

Retailers have found an interesting characteristic of consumers who browse their websites using tablets: They're much more likely to pull the trigger on purchases than other online shoppers.

...

While the conversion rate—orders divided by total visits—is 3% for shoppers using a traditional PC, it is 4% or 5% for shoppers using tablets, says Sucharita Mulpuru, an analyst at Forrester Research.

Many retailers also report that tablet users place bigger orders—in some cases adding 10% to 20% more to the tab—on average than shoppers using PCs or smartphones.

http://on.wsj.com/tQeCrx

[S2S]

But of course, as I don't currently have a position either way in RIMM, per Smazz's rules of discussion, I should just shut up.  ::)

[DCG]

 

Re: the razorblade analogy - are not apps, music, BES, Rimms version of razorblades?  They can take more margin from developers, especially if they induce start ups in their growing markets.

 

Last I saw, the amount if apps available for the playbook is around only 2,000, so in that case, no. And how much music does RIMM actually sell?

[Liberty]

Or, keeping in mind that the QNX or BBX Os is going to be cross platform.  Perhaps a whole new unit is on its way and they want to clear this inventory at better than zero.  If they bought out a new unit they would be saddled with the whole inventory.

 

I don't know. Developing a new OS is great, but if you do it, you damn well better make your brand new product compatible and upgradeable to it. Otherwise it just feels like you are shafting your customers by making something brand new obsolete. And if it is compatible, why the haste in clearing inventory so cheaply?

 

IMO what is happening is they realized their product wasn't competitive and wasn't selling, and that it was taking a lot of attention away internally from their core business in phones, so they're trying to exit that segment. I'm not sure of it, but the signs so far do point in that direction.