According to the statement, the Head of Telecoms, Eric Marchand stated that:
"Every day, our employees need to share and access confidential information so it's critical that we have the most secure and user friendly smartphones. With BES10, we are assured that the confidentiality of our information is maintained while also ensuring that Peugeot's employees can enjoy the best experience for personal as well as professional use."
The article continued with a statement that BES10 was chosen for it's complete end-to-end security, simplified integration and numerous enterprise applications.
Finally, the article continued with the current puffery that 30,000 customers have installed servers.
Before I continue, let me state that I have been bearish for a while but turned neutral with my previous article so the question is would I buy here?
On the plus side, this order is a decent sized order and while it won't move the needle on it's own, it is of course a step in the right direction towards placing their OS into the market. By showing the public that a large corporation has adopted OS10 in it's entirety, BBRY have a chance to convince other corporations to tread the same path.
On the other hand, there seems to be a lot to be read between the lines. I noticed firstly that this large order came from the phone model that the company has already written down by $934m and not the newer and more highly regarded Z30. Therefore it is likely that BlackBerry have taken a loss in order to win the contract. If you follow Peugeot, you would know that this is a company struggling for survival who would never undertake a huge mobile device roll out without a significant incentive to do so.
I also noticed on the press release that they say they have installed 30,000 commercial and test servers, meaning that we have no idea who has actually purchased it and who is evaluating it. Furthermore, they don't actually give a time scale and they could theoretically be adding numbers from the initial release.
Concluding this piece of news, I definitely see this is the correct approach for BlackBerry. Generate buzz and put their obsolete inventory to good use will get more OS10 systems out there and try and generate a userbase that wets developer appetites.
We cannot forget that this deal was probably made at a cash loss to BlackBerry and in my opinion, this $934m writedown that was previously a non-cash expense will now be crystallized as a cash expense.
Would I buy? Not yet, I would like to wait for the numbers and get a greater understanding of the new vision but I'm pleased that the management have done something right for a change, even if it burns more cash.