txlaw Posted November 13, 2012 Share Posted November 13, 2012 One of the more useful articles I've read about RIM recently: http://www.ottawacitizen.com/business/sees+world+opportunities+secure+network/7514153/story.html Paul Lucier, vice-president of global government solutions, said RIM already has one of the world’s most secure and reliable networks, so extending that network to other devices and systems that need security just makes sense. “We are in the middle of a major transformation,” said Lucier. “This isn’t just about releasing a new hand-held (device), that’s just the first part of this project. Soon sensors are going to be everywhere — you need to have infrastructure to run that on.” ---- In late October RIM announced it had been chosen by EnStream, a company set up by Canada’s three largest wireless networks, to provide the security infrastructure that would enable Canadians to begin paying for goods and services with their cellular phones at checkouts. The payment system known as a “mobile wallet” will work with many brands of cellular phones, not just RIM devices. ----- “We have a secure, efficient global network that ties all of our users together. That secure global network is unique to RIM and will become one of our most important assets.” ----- Embedded software. M2M communications. Encryption technologies. Network infrastructure. So, will the market finally give some credit to RIM for this? why would the market give credit for this? this is simply rimm produced PR supplied to a friendly media outlet. this is not going to drive shareholder value. what would drive shareholder value? how about a long shot, the successful launch of bb10? I would not go to rimm sourced PR for investment information. they are desperately trying to stay a part of the conversation in the face of losing their grip on many large customers. The point was not that the market should give credit to this particular story. (Btw, the Ottawa Citizen was just covering the GTEC Conference, which happened to be in Ottawa, and for which the Ottawa Citizen was a media partner.) The point was that what was said at the conference is consistent with a lot of the actions that RIM has been taking with respect to their QNX acquisition and what they've been building off of it, and how it might potentially link into the network side of the business. I believe you contend that BB10 will be DOA, which I still contend is a premature announcement. However, it looks like the Jan. 30 launch will give us an earlier opportunity than may have been thought to find out whether or not you're right. Link to comment Share on other sites More sharing options...
obtuse_investor Posted November 16, 2012 Share Posted November 16, 2012 13F News Chou funds has initiated a position in RIMM in Q3. Position appears to be a nominal 200,000 units. Source: http://www.sec.gov/Archives/edgar/data/1389403/000114420412062616/0001144204-12-062616-index.htm Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 16, 2012 Share Posted November 16, 2012 The point was not that the market should give credit to this particular story. (Btw, the Ottawa Citizen was just covering the GTEC Conference, which happened to be in Ottawa, and for which the Ottawa Citizen was a media partner.) The point was that what was said at the conference is consistent with a lot of the actions that RIM has been taking with respect to their QNX acquisition and what they've been building off of it, and how it might potentially link into the network side of the business. I believe you contend that BB10 will be DOA, which I still contend is a premature announcement. However, it looks like the Jan. 30 launch will give us an earlier opportunity than may have been thought to find out whether or not you're right. what else can rimm say? their business is decimated. they have no consumer presence in NA. they need a story. any story. and this is what corporate p/r came up with. if any kind of platform can be ubiquitous it's Android. A Canadian "friendly" took the bait. it's a story. as for bb10 being doa, I stand 100% by that. But you won't see it on Jan 30. That's when it's announced to the world. You will see it in late February. And only one of the two products. rimm is putting a brand new phone into the most competitive part of the N/A market. One phone.One half baked phone is going to save rimm? rimm will continue to sell 3-4 year old technology to the third world until their networks are upgraded. At that point they will buy Iphones Android phones and windows phones. if you gave warren buffett $5b and told him to go compete with the Iphone and Samsung Galaxy, would he do it? Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted November 16, 2012 Share Posted November 16, 2012 I think that RIM may be continuing to make the wrong bet on technology. Whatever you see now are bets they made a few years ago since product development takes time. In April 2010 RIM bought QNX. I believe the idea is that QNX is an OS that is designed for efficient power usage. It's a bet on battery life being important (and on software developers porting their software to the new OS). 2-3 years later the acquired technology will be the basis for BB10 whenever it's released. In my opinion, RIM has made a bet on the wrong thing. In the past they made a bet on compression... it turns out that consumers and wireless networks didn't really care that much about bandwidth. (Do Blackberry reviewers even talk about compression?) The functionality of the software on the phone is more important. It seems that once again RIM underestimated how important apps would be. The other platforms have better apps and they are going to decimate RIM's market share. RIM's killer apps (email and Blackberry Messenger) no longer protect it from its competition as competing platforms now have similar features. The hardware keyboard is one of RIM's strengths but touch keyboards have gotten a little better and the hardware keyboard reduces real estate for other things (e.g. a thin phone with no slide, or a bigger screen; the bigger screen is more compelling now that there are more apps). RIM is a very innovative company... unfortunately its competition is too. RIM is a decent company but capitalism can be brutal and unforgiving. On the other hand, if they can carve out a niche (or if somehow BB10 turns into a really strong ecosystem with a fast browser and lots of third party apps) they may do ok. They are losing their consumer base because BBM and a hardware keyboard are no longer the competitive advantages that they used to be. They may do ok as a low-cost smartphone in developing countries. Balsilie was going to focus RIM on that... but unfortunately the board decided to fire him. So now RIM is headed down the path of fighting an OS war it is going to lose. Link to comment Share on other sites More sharing options...
txlaw Posted November 17, 2012 Share Posted November 17, 2012 The point was not that the market should give credit to this particular story. (Btw, the Ottawa Citizen was just covering the GTEC Conference, which happened to be in Ottawa, and for which the Ottawa Citizen was a media partner.) The point was that what was said at the conference is consistent with a lot of the actions that RIM has been taking with respect to their QNX acquisition and what they've been building off of it, and how it might potentially link into the network side of the business. I believe you contend that BB10 will be DOA, which I still contend is a premature announcement. However, it looks like the Jan. 30 launch will give us an earlier opportunity than may have been thought to find out whether or not you're right. what else can rimm say? their business is decimated. they have no consumer presence in NA. they need a story. any story. and this is what corporate p/r came up with. if any kind of platform can be ubiquitous it's Android. A Canadian "friendly" took the bait. it's a story. as for bb10 being doa, I stand 100% by that. But you won't see it on Jan 30. That's when it's announced to the world. You will see it in late February. And only one of the two products. rimm is putting a brand new phone into the most competitive part of the N/A market. One phone.One half baked phone is going to save rimm? rimm will continue to sell 3-4 year old technology to the third world until their networks are upgraded. At that point they will buy Iphones Android phones and windows phones. if you gave warren buffett $5b and told him to go compete with the Iphone and Samsung Galaxy, would he do it? I think you're being a bit too cynical here. As I mentioned before, the Canadian "friendly" was a media partner for that conference. Of course they simply reported what was said by the RIM fellow at that conference. We're not talking about the NYT or even GigaOm. Nor are we talking about a nefarious PR plant, although certainly the guy at the conference was talking up RIM's products and services (that's his job). Don't confuse the value proposition that they were describing at that conference with BB10. That's a mistake. Even if BB10 is DOA, there is value in the other assets that RIM has, including QNX, the underlying technology behind BB10, RIM's proprietary network, Paratek, other IP, and more (yes, even brand value). As to RIM in the third world, if BB10 is a legit product that is competitive with the best (iOS, Android, and Windows), then there is a good shot that the third world will upgrade to BB10 when the time is right. We shall see if the BB10 OS (not simply the phone) is half baked. The very reason for delaying it was to make sure it wouldn't be half baked. Link to comment Share on other sites More sharing options...
txlaw Posted November 17, 2012 Share Posted November 17, 2012 I think that RIM may be continuing to make the wrong bet on technology. Whatever you see now are bets they made a few years ago since product development takes time. In April 2010 RIM bought QNX. I believe the idea is that QNX is an OS that is designed for efficient power usage. It's a bet on battery life being important (and on software developers porting their software to the new OS). 2-3 years later the acquired technology will be the basis for BB10 whenever it's released. In my opinion, RIM has made a bet on the wrong thing. In the past they made a bet on compression... it turns out that consumers and wireless networks didn't really care that much about bandwidth. (Do Blackberry reviewers even talk about compression?) The functionality of the software on the phone is more important. It seems that once again RIM underestimated how important apps would be. The other platforms have better apps and they are going to decimate RIM's market share. RIM's killer apps (email and Blackberry Messenger) no longer protect it from its competition as competing platforms now have similar features. The hardware keyboard is one of RIM's strengths but touch keyboards have gotten a little better and the hardware keyboard reduces real estate for other things (e.g. a thin phone with no slide, or a bigger screen; the bigger screen is more compelling now that there are more apps). RIM is a very innovative company... unfortunately its competition is too. RIM is a decent company but capitalism can be brutal and unforgiving. On the other hand, if they can carve out a niche (or if somehow BB10 turns into a really strong ecosystem with a fast browser and lots of third party apps) they may do ok. They are losing their consumer base because BBM and a hardware keyboard are no longer the competitive advantages that they used to be. They may do ok as a low-cost smartphone in developing countries. Balsilie was going to focus RIM on that... but unfortunately the board decided to fire him. So now RIM is headed down the path of fighting an OS war it is going to lose. The acquisition of QNX was focused on more than just power efficiency. Not sure where you're getting that. For starters: http://en.wikipedia.org/wiki/Real-time_operating_system http://www.ni.com/white-paper/3938/en http://www.osnews.com/story/15272/What_Is_QNX_/ Your post is very much focused on the past, and it appears you do not follow the company closely because all of the things that you are talking about -- functionality, UI (touch), apps, etc. -- are being addressed. In other words, if you had written this post a year ago, I probably would have agreed with you. Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 17, 2012 Share Posted November 17, 2012 I think you're being a bit too cynical here. As I mentioned before, the Canadian "friendly" was a media partner for that conference. Of course they simply reported what was said by the RIM fellow at that conference. We're not talking about the NYT or even GigaOm. Nor are we talking about a nefarious PR plant, although certainly the guy at the conference was talking up RIM's products and services (that's his job). Don't confuse the value proposition that they were describing at that conference with BB10. That's a mistake. Even if BB10 is DOA, there is value in the other assets that RIM has, including QNX, the underlying technology behind BB10, RIM's proprietary network, Paratek, other IP, and more (yes, even brand value). As to RIM in the third world, if BB10 is a legit product that is competitive with the best (iOS, Android, and Windows), then there is a good shot that the third world will upgrade to BB10 when the time is right. We shall see if the BB10 OS (not simply the phone) is half baked. The very reason for delaying it was to make sure it wouldn't be half baked. tx could you please explain their business model outside of selling devices to carriers? hopefully this model supports a $5b - $10b market cap? can you name any customers (other than the few that came along with qnx) that gives you confidence that rimm can make this huge transition and justify a multi billion $ market cap? rtos is pure commodity business. there is a list of them on wikipedia running 2 full pages. Android is "winning" http://www.androidauthority.com/android-android-everywhere-home-automation-beyond-8048/ http://embedded-computing.com/articles/android-rtos-duo-todays-medical-devices/# when will bb10 be ready for the "third world" given that we won't know if it's even viable in N/A until sometime next year? I just read that Android has over 90% market share in China? There is a reason that a free open source os has a high market share in a place like China. this os is too little and years too late. msft is already on their 3rd gen of windows phone and can't gain any traction in N/A. None. bb10 is 2 years behind wp8 in the market development cycle, and 5 and more years behind Android and Ios. can you update us on your theory that carriers like Verizon and Vodaphone are going to be launching their own devices and services based on BB10 OS? Can you provide color on licensing progress of BB10? Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted November 17, 2012 Share Posted November 17, 2012 The acquisition of QNX was focused on more than just power efficiency. Not sure where you're getting that. Hmm you're right I'm probably mistaken. Link to comment Share on other sites More sharing options...
Guest valueInv Posted November 17, 2012 Share Posted November 17, 2012 I think you're being a bit too cynical here. As I mentioned before, the Canadian "friendly" was a media partner for that conference. Of course they simply reported what was said by the RIM fellow at that conference. We're not talking about the NYT or even GigaOm. Nor are we talking about a nefarious PR plant, although certainly the guy at the conference was talking up RIM's products and services (that's his job). Really?Do we need to recount your posts on this thread? First you post a link which is essentially RIMM PR to support your point that RIMM is not getting credit for a bunch of buzz words. Then you backtrack and say that is not the point. Then you're proven wrong on the security front. You then try to wiggle out by using data efficiency as a red herring (you are wrong there too). Now he's being cynical? On top of it, you accuse others of being irrational while posting RIMM PR on topics you seem to understand very little. (yes, even brand value). I'm sure there is a lot of brand value in being the Big Lebowski on the mobile device world. ;D ;D ;D As to RIM in the third world, if BB10 is a legit product that is competitive with the best (iOS, Android, and Windows), then there is a good shot that the third world will upgrade to BB10 when the time is right. We shall see if the BB10 OS (not simply the phone) is half baked. The very reason for delaying it was to make sure it wouldn't be half baked. Link to comment Share on other sites More sharing options...
Guest valueInv Posted November 17, 2012 Share Posted November 17, 2012 Rimm stock is ripe for tax lossing selling season and possible investment in late December. Txlaw, Valueinv doesn't understand the nature of Rim's business on a go forward basis. My first project when I started out in the tech industry was to evaluate RTOSes for a network switch. I have spent four years at a mobile infrastructure vendor where I got an insider's view of operator networks all over the world. In addition, I did stint at a major Linux vendor. Call me crazy, but I tend to think I know a little bit about the industry and RIMM's business. Tell me, Uccmal, where does your understanding and deep insight into RIMMs business come from? Link to comment Share on other sites More sharing options...
txlaw Posted November 17, 2012 Share Posted November 17, 2012 tx could you please explain their business model outside of selling devices to carriers? hopefully this model supports a $5b - $10b market cap? can you name any customers (other than the few that came along with qnx) that gives you confidence that rimm can make this huge transition and justify a multi billion $ market cap? rtos is pure commodity business. there is a list of them on wikipedia running 2 full pages. They sell more than just devices. RIM sells devices, services, and software tied to the BB platform, which includes the devices, OS, network infrastructure, secure communications software (BES), and MDM software (MobileFusion). Everything is tied together to this platform, which in the past has been focused on secure communications. It's what made RIM the star in the mobile world -- and especially in the corporate world -- prior to the rise of Apple. RIM also sells non-BB platform services (see Enstream deal and QNX). What I believe is that when you look at the various assets that RIM controls and think about them with a break-up mentality, then subtract the liabilities, you easily get a value floor higher than $5 billion, assuming no cash burn. So the situation becomes low risk, potentially high return, assuming that value is not dissipated. However, I'm rooting for BB10 to succeed because then RIM could really be worth quite a bit intact. In fact, it would be a shame for such a great company to go down the tubes and be broken up. Android is "winning" http://www.androidauthority.com/android-android-everywhere-home-automation-beyond-8048/ http://embedded-computing.com/articles/android-rtos-duo-todays-medical-devices/# when will bb10 be ready for the "third world" given that we won't know if it's even viable in N/A until sometime next year? I just read that Android has over 90% market share in China? There is a reason that a free open source os has a high market share in a place like China. It's not that BB10 will need to be ready for the "third world." It's that the "third world" will need to be ready for BB10. The constraint is in telecommunications networks. You don't see people really using apps to the extent we do in NA when they have less than 3G coverage. I would hardly call China the "third world." Android is doing great -- won't dispute you there. this os is too little and years too late. msft is already on their 3rd gen of windows phone and can't gain any traction in N/A. None. bb10 is 2 years behind wp8 in the market development cycle, and 5 and more years behind Android and Ios. You have no clue whether the OS is too little. Too late, perhaps. When they unveil BB10, then feel free to say, I told you so -- this sucks. (Experience shows that you will say it sucks no matter what, though -- see your posts on Win 8.) However, from what I've seen and read about BB10, it actually looks like a competitive OS that has at least some features that are ahead of the incumbents. Having said that, perhaps BB10 will be like WebOS -- really forward thinking and innovative but DOA. I certainly hope not, as that would deprive me of a very nice upside from here. can you update us on your theory that carriers like Verizon and Vodaphone are going to be launching their own devices and services based on BB10 OS? Can you provide color on licensing progress of BB10? It wasn't really a definitive theory, but more like a possibility that I was throwing out there for RIM to use to potentially sell its wares. The possibility being that "carriers" (I use that term loosely) might like to have a carrier-friendly OS out there that drives use of carrier infrastructure versus "big tech" infrastructure (GOOG, AMZN, MSFT, etc.) I was sort of thinking entrepreneurially with those posts. As to licensing, who knows? I don't have insider information. Link to comment Share on other sites More sharing options...
txlaw Posted November 17, 2012 Share Posted November 17, 2012 Really?Do we need to recount your posts on this thread? First you post a link which is essentially RIMM PR to support your point that RIMM is not getting credit for a bunch of buzz words. Then you backtrack and say that is not the point. Then you're proven wrong on the security front. You then try to wiggle out by using data efficiency as a red herring (you are wrong there too). Now he's being cynical? On top of it, you accuse others of being irrational while posting RIMM PR on topics you seem to understand very little. Good lord, will you ever stop trolling me? Perhaps I shouldn't be feeding the trolls, but . . . First you post a link which is essentially RIMM PR to support your point that RIMM is not getting credit for a bunch of buzz words. Then you backtrack and say that is not the point. If you think those were just buzz words I was saying, you should be fired from whatever tech job you have. But I suspect you actually know that those are not merely buzz words, but concepts that actually mean something (embedded software, M2M communications, encryption technologies, network infrastructure), and you are just trolling me. Moreover, I did not backtrack. What I told rimm_never_sleeps is that my post was not intended to convey the notion that the market should take heed of the specific article that I linked to, which he called "PR supplied to a friendly media outlet." I will quote myself: "The point was that what was said at the conference is consistent with a lot of the actions that RIM has been taking with respect to their QNX acquisition and what they've been building off of it, and how it might potentially link into the network side of the business." In other words, I believe that the actions that RIM has been taking with QNX implicate its use -- in concert with RIM network infrastructure and encryption technologies -- for M2M communications. I'm not sure how I can make it more clear than that, other than defining these terms for you. Of course, I'm not going to waste my time doing that. Just read the "backtrack" post again, and maybe you'll understand the second time around. Finally, had I posted an article by an analyst speculating that BB10 would be DOA or that it would be delayed until Q2 of next year, would you have had any qualms about that? I suspect not. You probably would have made a snide remark agreeing with me. Gimme a break. Seriously. Then you're proven wrong on the security front. You then try to wiggle out by using data efficiency as a red herring (you are wrong there too). Haha, I don't think I was proven wrong on the security front by anything you or portfolio14 said. I doubt any of us have the ability to really opine on secure communications models and why RIM will be left completely out in the cold because of the Internets. In fact, I readily admitted that I cannot opine on that. I realize you've been in Silicon Valley for over 15 years or something like that, and that you went to B-school and whatnot, and that you have an RSS feed where you subscribe to a gazillion tech related sites and blogs, but something tells me you're not an expert in data and communications security. As for the point about data efficiency, I was simply pointing out that that would be an additional reason for why there is value in RIM's network infrastructure. I wasn't trying to wriggle out of anything. Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 17, 2012 Share Posted November 17, 2012 They sell more than just devices. RIM sells devices, services, and software tied to the BB platform, which includes the devices, OS, network infrastructure, secure communications software (BES), and MDM software (MobileFusion). Everything is tied together to this platform, which in the past has been focused on secure communications. It's what made RIM the star in the mobile world -- and especially in the corporate world -- prior to the rise of Apple. RIM also sells non-BB platform services (see Enstream deal and QNX). What I believe is that when you look at the various assets that RIM controls and think about them with a break-up mentality, then subtract the liabilities, you easily get a value floor higher than $5 billion, assuming no cash burn. So the situation becomes low risk, potentially high return, assuming that value is not dissipated. However, I'm rooting for BB10 to succeed because then RIM could really be worth quite a bit intact. In fact, it would be a shame for such a great company to go down the tubes and be broken up. Android is "winning" http://www.androidauthority.com/android-android-everywhere-home-automation-beyond-8048/ http://embedded-computing.com/articles/android-rtos-duo-todays-medical-devices/# when will bb10 be ready for the "third world" given that we won't know if it's even viable in N/A until sometime next year? I just read that Android has over 90% market share in China? There is a reason that a free open source os has a high market share in a place like China. It's not that BB10 will need to be ready for the "third world." It's that the "third world" will need to be ready for BB10. The constraint is in telecommunications networks. You don't see people really using apps to the extent we do in NA when they have less than 3G coverage. I would hardly call China the "third world." Android is doing great -- won't dispute you there. this os is too little and years too late. msft is already on their 3rd gen of windows phone and can't gain any traction in N/A. None. bb10 is 2 years behind wp8 in the market development cycle, and 5 and more years behind Android and Ios. You have no clue whether the OS is too little. Too late, perhaps. When they unveil BB10, then feel free to say, I told you so -- this sucks. (Experience shows that you will say it sucks no matter what, though -- see your posts on Win 8.) However, from what I've seen and read about BB10, it actually looks like a competitive OS that has at least some features that are ahead of the incumbents. Having said that, perhaps BB10 will be like WebOS -- really forward thinking and innovative but DOA. I certainly hope not, as that would deprive me of a very nice upside from here. can you update us on your theory that carriers like Verizon and Vodaphone are going to be launching their own devices and services based on BB10 OS? Can you provide color on licensing progress of BB10? It wasn't really a definitive theory, but more like a possibility that I was throwing out there for RIM to use to potentially sell its wares. The possibility being that "carriers" (I use that term loosely) might like to have a carrier-friendly OS out there that drives use of carrier infrastructure versus "big tech" infrastructure (GOOG, AMZN, MSFT, etc.) I was sort of thinking entrepreneurially with those posts. As to licensing, who knows? I don't have insider information. rimm could not sell services unless they bundled devices. I don't see a service business without selling a device first. if they have such a business, why don't they break it out? their disclosure is poor. There are already predictions that service revenue is set to decline. why? because device revenue is declining. device revenue is falling off a cliff. Service revenue is going to follow suit. I asked you for a business model. But really what you've given is a series of vague marketing pitches that don't come near to nailing down a business model that justifies this market cap. Please be quantitative and show me a model that supports a $5b-$10b market cap. Show me a model that gets them $500m of net income per year. Surely one would not make a blind investment in a $5b company that did not have a sound business model that supported that market value? You say that the third world is "waiting" for bb10. The infrastructure just needs upgrading. This seems to be another misguided view of what is really happening. In fact bb10 is not even on their radar. There is no release date yet for bb10 outside of N/A. that means it's mid to late 2013 at the earliest. It's as if it doesn't exist for them. bb10 is not a natural upgrade from rimm's 3 year old phones that they are selling now. rimm provides no natural upgrade path for their customer to bb10. it's a complete break. bb10 is a total departure from their previous systems. It's so new that it will provide a window for customers to switch platforms, since they have to learn a new system anyway. Emerging market customers are not waiting for bb10. What they are waiting for, when the networks get in place, are rich capable devices that work well, and are supported with ecosystems and apps. As of this moment, rimm sells 3 year old phones. When the time comes, one should not magically expect these people to simply switch over to bb10, a system that is so far nothing but vaporware. That would not make sense. You blithely discount the idea that these people would do the rational thing and instead choose phones with a mature OS that is reliable, proven, available, working, with apps, ecosystems, and massive carrier and developer support from the biggest and best companies in the business: Apple, Samsung, Google, Microsoft, Nokia. But that's the logical thing for them to do. Like those who had a similar choice in N/A, they will choose Apple Iphones, Google Android phones and Windows phones from Samsung Nokia and HTC. And there is a good sound basis for this choice. To say they are waiting for bb10 demonstrates an emotional investment and wishful thinking in this idea that bb10 is going to be winning capital investment for rimm. This theory is on par with the idea that Verizon and Vodaphone and the like are also "waiting" to license bb10, because they want to sell private label devices and services. And bb10 is their pot of gold at the end of the Rainbow. But they aren't waiting for bb10 either. They have taken a pass. Link to comment Share on other sites More sharing options...
VAL9000 Posted November 17, 2012 Share Posted November 17, 2012 rimm could not sell services unless they bundled devices. I don't see a service business without selling a device first. if they have such a business, why don't they break it out? their disclosure is poor. There are already predictions that service revenue is set to decline. why? because device revenue is declining. device revenue is falling off a cliff. Service revenue is going to follow suit. RIM could easily sell services without selling devices. What makes you think that they cannot do this? Although I would say that this isn't their model today and probably won't be for a while (if ever). This was a business model that was proposed/pushed by Balsillie and later rejected in favour of the current strategy. Nobody breaks out numbers to that detail, and especially not for nascent businesses. Service revenue will follow device revenue if they don't continue signing more subscribers. I asked you for a business model. But really what you've given is a series of vague marketing pitches that don't come near to nailing down a business model that justifies this market cap. Please be quantitative and show me a model that supports a $5b-$10b market cap. Show me a model that gets them $500m of net income per year. Surely one would not make a blind investment in a $5b company that did not have a sound business model that supported that market value? I think tx already outlined that his valuation of RIM's break-up value exceeds $5bn. Back of the envelope, if you liquidated their property and plants, maybe $2bn comes from there. If you sold their patents, $1-4bn (we'll say $2bn for ease of argument). If you sold their network and subscribers.. well that's 75 million customers and $4bn/year today.. so something more than $1b I would assume? It's not hard to see the numbers, and these are pretty conservative. If you want a business model, here is one. RIM maintains or replaces its existing 75mm subscribers with BB10. i.e. for every smartphone customer they lose, they gain someone buying a car connected to RIM's network or some other device doing the same. We'll assume they pay $2/mo instead of the current $4-5/mo. That's $1,800mm per year in very profitable revenue. That's worth $5bn. You say that the third world is "waiting" for bb10. The infrastructure just needs upgrading. This seems to be another misguided view of what is really happening. In fact bb10 is not even on their radar. There is no release date yet for bb10 outside of N/A. that means it's mid to late 2013 at the earliest. It's as if it doesn't exist for them. bb10 is not a natural upgrade from rimm's 3 year old phones that they are selling now. rimm provides no natural upgrade path for their customer to bb10. it's a complete break. bb10 is a total departure from their previous systems. It's so new that it will provide a window for customers to switch platforms, since they have to learn a new system anyway. Emerging market customers are not waiting for bb10. What they are waiting for, when the networks get in place, are rich capable devices that work well, and are supported with ecosystems and apps. As of this moment, rimm sells 3 year old phones. When the time comes, one should not magically expect these people to simply switch over to bb10, a system that is so far nothing but vaporware. That would not make sense. You blithely discount the idea that these people would do the rational thing and instead choose phones with a mature OS that is reliable, proven, available, working, with apps, ecosystems, and massive carrier and developer support from the biggest and best companies in the business: Apple, Samsung, Google, Microsoft, Nokia. But that's the logical thing for them to do. Like those who had a similar choice in N/A, they will choose Apple Iphones, Google Android phones and Windows phones from Samsung Nokia and HTC. And there is a good sound basis for this choice. Tx never said the third world was waiting for BB10. He said that the third world likely cannot take advantage of what BB10 has to offer due to infrastructure constraints. To say they are waiting for bb10 demonstrates an emotional investment and wishful thinking in this idea that bb10 is going to be winning capital investment for rimm. This theory is on par with the idea that Verizon and Vodaphone and the like are also "waiting" to license bb10, because they want to sell private label devices and services. And bb10 is their pot of gold at the end of the Rainbow. But they aren't waiting for bb10 either. They have taken a pass. Again, Tx has been pretty clear that he sees BB10 as an upside to his investment thesis. He has said nothing more wishful than believing that BB10 could be successful and that success would result in significant profits for his investments. Honestly though, I think there is just a general lack of respect being offered here. I don't mean that like "oh you should stop doubting txlaw because he's earned his opinion". You should doubt him, because he's probably wrong pretty often. What I mean is that you should actually take the time to read and understand the argument and thesis before spilling a bowl of vitriol all over the thread. I mean respect as in, respect the time that people put into working on the board. Read and understand their arguments before responding in kind. Do the required research before posting an opinion by searching for the facts and offering them. Check your spelling and grammar three times before posting because you actually care about how you present your argument to others. That's respect and I don't see enough of it in these tech threads. Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 17, 2012 Share Posted November 17, 2012 you know if you took this idea of long rimm to NYC and tried to sell it to hedge funds and other institutional investors, they would pick it apart in much the way I am. They can be ruthless in getting to the heart of the matter (believe me I know). getting down to brass taxes. It's not a time nor place to ask for respect. Getting the idea picked apart is a good exercise though because it forces you to really get a handle on your thesis. to separate what you really know from what you don't know. to me, the liquidation analysis is not to be relied on. Can the network business easily be extracted from the device business? they go hand in hand. If this is true, I don't think rimm can easily sell the network business totally reliant on rimm devices for a high price. the network business is not viable without rimm devices on it. there is no proven model to sell services to other customers. nor have I heard a well defined plan to get new customers. to my knowledge rimm has never sold service to anyone that has not first purchased rimm handsets. the current revenue comes from people who use rimm devices. The patents are extremely hard to value. every patent set is different. yet the way they are valued here is very random and imprecise. Lot's of guesswork. If a liquidation (last resort) has to be done on rimm it won't look like anything it looks like now. Lots of cash will be burned. It will have destroyed lots of shareholder value before it gets to that stage. Management's don't give up easily. As long as there are assets, as long as there is cash, they will keep trying. they are getting paid. So they try and try. that's what burns shareholder value. Managements don't give up easily. They can be persuasive. As for the new business plan, who is the proposed customer? what is rimm offering them? what is the price? what is the value? how many cars are connected to rimm's network now? what are they paying? what product is rimm offering to car companies? what's their value proposition? why will car companies pay rimm for services? what's the estimated take up? what % of cars could have rimm services. when can this be a viable business? your numbers seem vague. they seem random. they do not seem to be well supported. But this is what rimm management is spoon feeding. they don't yet know how to articulate their future. So rimm supporters are left with vagueness. as vague as this plan is, you seem somewhat cavalier in stating that this business could replace rimm's device business on a 1 for 1 basis. what makes you say that? what data can you provide that makes you say that? because we all would like to have something solid if we are going to spend $5b on a business that currently has a vague business plan if their device business does not work. you're proposing to buy a $5b-$10b business that has no current backup business plan after the failing device business. You have faith they will just "invent" some new revenue stream and business model out of their existing asset base. Can you be more specific? Where is rimm going to get new revenue? Who is going to buy rimm services, how many of them will buy, what service will they buy, and at what price? if you can't answer these questions you're not investing on a sound basis imo. I don't know who is going to pay $5b for assets in liquidation that can't produce $500m in net income. They are currently losing money on it's operations. no tx did not say that they are waiting for bb10. but that's exactly what his answer implied. he said once these countries get the right infrastructure in place they will be ready and will start buying bb10 devices. I said that theory makes no sense. I gave lots and lots of support for my conclusion. Finally, for the record, I am open to changing my mind on rimm. My thesis, however, is that their device business is not viable any longer. So I would need to understand the new business model in great detail. In fact at these prices, it would really only take the confidence that they have an understandable, solid, defined plan in place that could make $500m of net income a year. I am hoping that in the months ahead, rimm puts some meat on those bones and provides a solid reason for value investors to bet on them. Link to comment Share on other sites More sharing options...
VAL9000 Posted November 17, 2012 Share Posted November 17, 2012 your liquidation analysis seems full of holes imo. the network business can't be easily extracted from the device business. they go hand in hand. If this is true, I don't think rimm can sell the network business for anywhere near that. the network business is not viable without rimm devices on it. there is no proven model to sell services to anyone. Show me a better one. to my knowledge rimm has never sold service to anyone that has not first purchased rimm handsets. the current revenue comes from people who use rimm devices. The patents are extremely hard to value. every patent set is different yet the way they are valued here is very random and imprecise. Lot's of guesswork. If a liquidation has to be done on rimm it won't look like anything it looks like now. Lots of cash will be burned. It will have destroyed lots of shareholder value before it gets to that stage. You must have a lot of trouble investing if you are this uncomfortable with guesswork. What is your evidence that lots of cash will be burned in a liquidation? How much? How quickly? What are they burning it on? Who burns the cash? Is it in a barrel or is it in a fire pit? Do they burn mostly $5's, $10's, $20's, or $50's? Oh actually this is pure guesswork on your part. I guess when you guess it's OK, but when I guess it's not. Guess I'll keep that in mind. As for the new business plan, who is the proposed customer? what is rimm offering them? what is the price? what is the value? how many cars are connected to rimm's network now? what are they paying? what product is rimm offering to car companies? what's their value proposition? why will car companies pay rimm for services? what's the estimated take up? what % of cars could have rimm services. when can this be a viable business? You know that I can't answer half of these questions without turning it into pure conjecture. This whole paragraph is just a trick to make you look like you've got a better grasp on the subject matter than I do. A cheap psychological trick, bravo. Anybody who knows about RIM knows that these questions can't be answered factually. I'm not going to fall for that. Maybe instead next time you can pretend that every word you post should have real value. Assume that every question you ask will be taken seriously. Then only ask the questions that you would want someone to spend their time thinking about and answering. The answer I will provide is that I don't know with precision who is going to buy what or why. What I do know is that QNX runs on a ton of cars today, and that I could see a number of interesting services that auto manufacturers would love to include in their vehicles to make them more appealing and competitive. Here is one: telemetry. It's incredibly useful in diagnosing a car's performance and is a great thing to run on RIM's network. There's very little data, but it's an "always-on" thing and is likely not cost competitive through a telecom network. I also know that there are a number of similar services that traditional telecom companies won't be able to support because it doesn't work with their business model. RIM's network is much more suited to low-cost, low-bandwidth specialist applications. Large telecoms don't have the flexibility to support these applications, small telecoms don't have the coverage. your numbers seem vague. they seem random. they do not seem to be well supported. But this is what rimm management is spoon feeding. they don't yet know how to articulate their future. So rimm supporters are left with vagueness. Perhaps they seem that way because you did roughly zero work validating them. What is wrong with my numbers? What should the numbers be? What didn't I include that I should have? At the very least you could show me the same level of detail that I showed you. Show me where I went wrong and why. I need to learn. When you say "my numbers seem" something, I think you mean "I disagree with what you say for no good reason that I can list here". Show me what better numbers are and why. Take a real concrete position instead of an amorphous argument that you can torture into whatever form suits you currently. I can do that, too. It's really, really easy to do. as vague as this plan is, you seem somewhat cavalier in stating that this business could replace rimm's device business on a 1 for 1 basis. what makes you say that? what data can you provide that makes you say that? because we all would like to have something solid if we are going to spend $5b on a business that currently has a vague business plan if their device business does not work. Oh yes, I am very cavalier about these numbers. Look at how brave I am to predict that a business could achieve 0% growth at half the price. Pick whatever number you want then and put a valuation on it then. I gave you a template. Show me what the service run off rate is going to be and how that doesn't amount to a greater than $1bn valuation. you're proposing to buy a $5b-$10b business that has no current backup business plan after the failing device business. You have faith they will just "invent" some new revenue stream and business model out of their existing asset base. Be specific. Where is rimm going to get new revenue? Who is going to buy rimm services, how many of them will buy, what service will they buy, and at what price? if you can't answer that you're investing on a hope and a prayer. I don't know who is going to pay $5b for assets in liquidation that can't produce $500m in net income. I think that most of this has already been answered in a few different ways. You dispute every potential form of revenue that RIM could earn, so we can just leave it at that. I seriously don't understand why you don't just make a post that says "I think RIM is worth zero, here is why, and I will never have to refer to this thread again". It just seems instead that you would prefer to lob a bunch of silly questions and attempt to deconstruct someone else's analysis. You provide no original analysis, apply zero rigor to your posts, while simultaneously accusing others of being vague and emotional. It's hypocritical, counterproductive, and as far as an investment board is concerned, it's trolling. no tx did not say that they are waiting for bb10. but that's exactly what his answer implied. he said once these countries get the right infrastructure in place they will be ready and will start buying bb10 devices. I said that theory makes no sense. I gave lots and lots of support for my conclusion. No, I think that what you inferred from his answer and what he implied are two different things, and you are trying to tie them together after I pointed out that you are wrong. BB10 will obviously need to compete with iOS, WP8, and Android for all customers' business in the future. But that is so plainly obvious I don't understand why we would spend any time talking about it at all. Link to comment Share on other sites More sharing options...
roundball100 Posted November 18, 2012 Share Posted November 18, 2012 > Who burns the cash? Is it in a barrel or is it in a fire pit? I have to log off I am laughing so hard ... priceless. Link to comment Share on other sites More sharing options...
txlaw Posted November 18, 2012 Share Posted November 18, 2012 Let me give the board (I'm through going back and forth with certain members) a concrete example of how RIM is leveraging its existing assets, one that was announced less than a month ago, and one from which RIM will derive service revenue that is not tied to its Blackberry platform. RIM has been selected to be the Secure Element Manger (SEM) provider for Enstream, which is a JV of Bell Mobility, Rogers Wireless, and TELUS that is providing NFC payments in the land of the Canucks. This SEM solution will be used not only for Blackberry devices, but also for Android and Winphone devices (Apple has yet to offer NFC in its phones). http://www.marketwire.com/press-release/rims-secure-element-manager-solution-to-power-nfc-mobile-payments-in-canada-nasdaq-rimm-1715950.htm Quote from Enstream press release: By adopting the secure GSMA Global Platform standard and using SEM infrastructure hosted and operated by RIM, consumers and financial institutions can have full confidence in financial credentials enabled through EnStream. That is service revenue that is going to be coming in the future. Now imagine if RIM could do the same in the other places where they have a presence. Hell, if Indonesia alone went to NFC payments managed by RIM, that would be a pretty nice use of that infrastructure. Here is another example that RIM is clearly working on. RIM acquired this company called QNX, which provides operating systems for embedded systems. QNX is in cars, tractors, airplanes, military equipment, and more. Go to qnx.com to learn more. QNX recently announced a new software development kit (SDK) to allow developers to create apps for the car using HTML5. See http://www.qnx.com/news/pr_4840_1.html. The new HTML5 SDK is an extension of the open source BlackBerry® WebWorks™ framework, specially optimized for automotive environments. It allows developers to write, test, and package feature-rich automotive apps based on HTML5, CSS3, JavaScript, and other open standards. Just as important, it provides the missing glue between high-level apps and the car, through specialized APIs that provide access to automotive devices and hardware. These APIs include JavaScript classes that can access the HVAC, GPS, multimedia, and other services offered by the QNX CAR 2 application platform. These apps that we will be seeing in cars will be connected to the Internets for various reasons, including for telemetry, as Val alluded to in his post. See http://www.economist.com/node/14902759 and http://analysis.telematicsupdate.com/ for an intro to telemetry in cars. Imagine a future where every car is constantly sending data over the wireless networks for various reasons, some of which could be quite sensitive (e.g., location and identity data and identify). One might imagine that security and data compression could be very helpful for such applications, especially if we get to a world where tons and tons of things are connected to the Internets and sending data across it constantly. Now we come to machine-to-machine (M2M) communications and the Internet of Things. What is M2M and the Internet of Things? See http://en.wikipedia.org/wiki/Machine_to_Machine. See http://en.wikipedia.org/wiki/Internet_of_Things. It would be too long of a post to go into everything about these concepts, but the short of it is that cheap, ubiquitous connectivity to telecommunications networks makes it possible to have all sorts of devices, applications, and sensors out there in the world that are transmitting data to various places. What does M2M have to do with RIM? Well, the QNX solutions being provided are a direct example of how RIM could leverage its network infrastructure and encryption technologies for a number of purposes that we will be seeing in the future. Indeed, at the GTEC conference in Ottawa (see http://www.gtec.ca/) -- where RIM presented -- they indicated that they are going to try to get their network infrastructure used for various M2M applications, including in the "automotive, nuclear power and even medical industries." This is why I said this was a useful article, as it provides a bit of information for those who want to know why exactly the assets that RIM has are useful separate and apart from BB10. Folks, I offer all this up not because I am trying to pump RIM or because I am emotionally involved in a way that makes me want to defend RIM. I want people who are invested in FFH to understand the possibilities with this RIM investment and why I believe FFH has bet on the company. I have put my money where my mouth is already, and I don't think I can move markets with my posts, so this is for the board's benefit mostly. I am trying to demonstrate -- without doing all the work that needs to be done for the investor -- why RIM has valuable assets and why it is not worth $0. Moreover, IMO, there is a potential lollapalooza here if BB10 is successful, which is why I have put my money where my mouth it is. I hope you find these posts useful. Link to comment Share on other sites More sharing options...
stahleyp Posted November 18, 2012 Share Posted November 18, 2012 For what it's worth, since rimm never sleeps started posting (8/16), rimm is up over 22% vs about -4% for s&p 500. ;D Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 18, 2012 Share Posted November 18, 2012 For what it's worth, since rimm never sleeps started posting (8/16), rimm is up over 22% vs about -4% for s&p 500. ;D perhaps you should tell us how much rimm is down since you first invested. :) Link to comment Share on other sites More sharing options...
stahleyp Posted November 18, 2012 Share Posted November 18, 2012 For what it's worth, since rimm never sleeps started posting (8/16), rimm is up over 22% vs about -4% for s&p 500. ;D perhaps you should tell us how much rimm is down since you first invested. :) I would...but it's not. ;D Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 19, 2012 Share Posted November 19, 2012 For what it's worth, since rimm never sleeps started posting (8/16), rimm is up over 22% vs about -4% for s&p 500. ;D perhaps you should tell us how much rimm is down since you first invested. :) I would...but it's not. ;D that mean you didn't buy those LEAPS you were looking at Last Year? :) you may not have been long but you sure got it wrong. didn't you? Link to comment Share on other sites More sharing options...
stahleyp Posted November 19, 2012 Share Posted November 19, 2012 For what it's worth, since rimm never sleeps started posting (8/16), rimm is up over 22% vs about -4% for s&p 500. ;D perhaps you should tell us how much rimm is down since you first invested. :) I would...but it's not. ;D that mean you didn't buy those LEAPS you were looking at Last Year? :) you may not have been long but you sure got it wrong. didn't you? haha. Yeah, I didn't touch it last year (thankfully). Has it really been that long since I was looking at this? wow! I would've been wrong had I pulled the trigger then. ;) I'm wrong enough but thankfully things usually (not always!) work out okay. :) Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 19, 2012 Share Posted November 19, 2012 Settlement Date Short Interest Avg Daily Share Volume Days To Cover 10/31/2012 95,397,618 13,252,696 7.198356 11/15/2011 44,658,200 23,336,791 1.913639 Read more: http://www.nasdaq.com/symbol/rimm/short-interest#ixzz2CckQpxYz Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted November 19, 2012 Share Posted November 19, 2012 http://bgr.com/2012/11/19/thorsten-heins-interview-blackberry-10/?utm_source=dlvr.it&utm_medium=twitter Heins told the paper that within three to five years, his company’s BlackBerry 10 platform will eliminate the need for laptop computers. http://bgr.com/2012/07/09/rim-ceo-lawsuit-blackberry-10/ Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now