Crumb's Observer

Crumb's Observer
Contributor since: 2012
BlackBerry has changed the definition of subs to include any device using BlackBerry services, even those not generating income. So BB10 users are being counted as subs.
And yes, the way they define a subscriber is anyone using BlackBerry services, so iOS and Android BES10 users should count. I would imagine that any new iOS and Android BBM users might count also and cars like Mercedes running the latest QNX car/BB10 system eventually as well.
I think service revenue will be under pressure until BES10 starts getting more traction and outpaces the losses of those $2 emerging market BIS users.
For subscribers, I think Q5 will help to stabilize losses this summer quarter but the real shocker for Wall St. Will be when every BBM user gets 2 iOS or Android users to use the service. BBM subs would go from 60 million to 180 million in that case.
BBM has probably the highest engagement level of any social media/messaging app and that is what the bears are missing. Why is that so, and why will it not be on tablets, iPad or even playbooks? Because your phone is anyways on you and BlackBerry wants to keep that high level of immediacy and engagement on BBM when it goes cross platform. The engagement level (combined with security and reliablity) is really a bug part of what separates a poor communication experience from an amazing one. The only other is issue is ubiquity, and that should be improved greatly when it goes cross platform.
One reason I am not that worried is that actions speak louder than words. I think more good will come from DoD's ringing endorsement of BB10 And BES10 then harm from one vague Guardian letter. Think about the cascading effect of Pentagon's approval for both the devices and the BES10 MDM solution. BB10 spreads from the most secure US industry, defence, to others like pharmacy and finance...and then so. I'm sure that "the Pentagon is using it" will go through one CIO'S head after another for years to come, long after that Guardian article is forgotten.
Wow Ziffster, for a long, you sure have a funny way expressing it. Honestly, in a couple weeks it is quite likely that people will barely remember that BBBY had anything to do with this given that
A) The information is vague and difficult to impossible to confirm
B) The majority of those that do know more are not going to talk
C) For security conscious organizations there is still nothing that touches BlackBerry
D) The Guardian's image has been tarnished (for those paying attention) by the previous sloppy and embarrassing hit piece they did on BBRY that was pulled.
Yet here we are with an article that is 80% fear mongering, questioning the security of BES10, when we haven't the slightest clue as to the details of the supposed breach.
I think most would agree that it is highly unlikely that a BES server had anything to do with this yet here you say things like
"If BES security is compromised, watch for news releases from various governments downgrading the security clearance allowed for data sent using BlackBerry devices." or
"Ask yourself:
Can BES10 succeed in a competitive marketplace if it doesn't live up to its security claims?
Will auto manufacturers use BBM for MTM (machine to machine) firmware updates if BBM can be hacked?...If accurate, this news could derail BlackBerry's long-term recovery"
What "news"? Some vaguely worded impossible to confirm attack on BlackBerry's reputation?
Seriously though this sounds like an anxious short hit piece grasping at straws. But if you are truly long BBRY and all this goes through your head every time someone comes out with unsubstantiated attack on BlackBerry, then you are in the wrong stock. Because longtime BlackBerry shareholders have been dealing with these panic attacks for 2 years now, and this is one that I am personally not loosing any sleep over.
We know that there are now 12000 installed so far, but most phone sales associated with BES10 were probably corporate. The lineups were likely SMB, diehards, and exporters. I know that the place that I work was waiting to buy BB10 units until BES10.1 and the Q10 came out. BES10.1 is the gas that will accelerate BB10 unit sales.
The longer he waits to update on Q10 sales the better as they are directly linked to BES10 adoption, which is just starting to move from the testing stage to deployment stage in many companies.
Wrong, Luke, wrong. PlayBook OS was their first stab at taking QNX and putting it on a mobile device. The entire exterior software layer is built with adobe Air which causes decreased performance because it, being a third party platform, could not be optimized for the hardware.
The exterior layer of BB10 is native C+/C++ code called Cascades developed by the astonishing tribe, much much better performance. Look them up, they are very well regarded. BB10 software is proving to have significant improvements over playbook OS
That is the beauty of what BBRY is doing. They are embracing the standards just like they did with mobile email. Many have done mobile email and instant messaging, but BlackBerry did it better than anyone. That is what kept them alive while they worked with QNX on BB10.
So they will do to HTML5, LTE, bluetooth, NFC, WIFI what they did with email and BBM. They will use the standards better. They already are; look at the HTML5 performance of the BB10 browser, its best in class...heck the whole browser app itself is written in HTLML and CSS, that's gutsy. And the performance is good, Zuckerberg was wrong. HTML5 will be prime time because of BBRY, and lesser so Tizen and Firefox.
"that they love it so much and that when they picked up their old iphone found themselves trying to close apps like on BB10."
I believe you are referring to the Phantom Swipe of BB10
Phantom Swipe (Urban Dictionary)

That frustrating moment when BlackBerry 10 users try to effortlessly swipe a non-BlackBerry touchscreen to flow between apps or screens. It quickly becomes menacing beyond all belief.
Example: Joe forgot his Blackberry Playbook at home and grabbed his friend’s iPad to look something up. His phantom swipe made him realize just how archaic and inefficient the iPad's home button really is.
Gmom, no problem. A lot of people attribute the Apple Store's success to the products, but when you look at Ron Johnson's resume, and start to piece clues together of how he thinks you start to realize how silly and lazy analysts are for assuming that Steve Jobs was the only reason that Apple was so successful.
I may not have done anywhere near the extensive research that Matt has, but I see the genius and desire to win that Ron Johnson has. Sometimes geniuses like Ron screw up really bad, put they pivot really fast. They're also not afraid to make the out-of-the-box changes that can lead to ground breaking improvements. All this means that the chance that Ron gets it right eventually, and gets it right really big, is quite good.
The downside is protected by the real estate and the ability to go more promotional as Ron has demonstrated. The 2.5 Billion in liquidity (cash and credit), the non-core and even core real estate available to monotonize, the vastly improving sales per square foot and the easy comps coming up make this a no brainer for those willing to hold on for a year or two.
"There are certain ways we have to fold different brands. There are certain ways the dress shirts have to be stacked depending on whether they are in cubbies or stacked on tables "
That sounds like the next chapter of the book, "Apple’s Secret Employee Training Manual" below. And we all know how that turned out. Most successful business people will tell you it's the details that count when it comes to building businesses.
We live in a world where getting information is not the problem, it is knowing which data points to pay attention to; it is the same problem that search engines have. Their are too many "AltaVista" and "Yahoo search" investors out there. To become the "Google" of investors (ie know what information is relevant and what is just noise) you have to sink hours and hours of time understanding the granular details of the companies that you invest in. In Buffet's heyday, that meant reading and rereading every company document available. It meant reading the fine print. For Peter Lynch it meant pounding the pavement, like Matt is doing, to understand what is happening on the ground. It means admitting that sometimes the angle that you researching was the wrong approach and moving quickly in another direction.
I agree gmom's insight is very useful, especially for those that don't live near a JCP.
You speak three languages, that's will be able to type mixing all three and use the awesome Z10 keyboard's predictive text. No need to switch settings. You can switch languages mid sentence and the Z10 predictive text will switch languages with you!
Hi Luke, the version of QNX running BB10 that I mentioned runs everything from 32 core Cisco routers, to slot machines, to the QNX car (62% of cars with an infotainment system), nuclear reactors, 911 dispatch systems,high speed train control, air traffic control systems, laser eye surgery and yes, many medical devices. Dan Dodge likes to say that QNX runs in environments where the cost of system failure or need of a reboot is very high. Here is a link to the 30 ways that QNX touches your life
Sounds like you are not that convinced, so I say, continue your research and good luck whether you are long RIMM or NOK.
Thanks for sharing your hard work with us retail investors. I've yet to hear a short case that is well supported with objective data, most of it is vague fear mongering.
Hi Luke,
The version of QNX underpinning BB10 (the kernel itself, the most important part stability and security wise) is very mature and field tested being that was released in 1999. It has a very good record. The mobile software stacks built on top is the new part. But in terms of reliability, the QNX kernel it is using is unmatched in any system, desktop or embedded. The whole OS (BB10 ) was also FIPS 140 certified months ago, so that gives some clue as to the quality of OS.
As far as OS7 being miles apart from BB10, there are alot of overlapping 'hooks': BBM (emerging markets especially), enterprise base, also people get used to the tight social integration of BB7 and don't want to lose that. Basically all the reasons that current users (especially north American ) have stuck with the current aging platform gives us some confidence that they will make the leap to BB10.
Luke, There is a very high level of insider / strong hand ownership in this company that is in it for the long haul. Between Prem Watsa (20%), the former Ceo's, Yactman, and Primecap there is 35% to 40% of shares right there. Many are on the record saying they are in it for the the long haul. Anyways, if you get an offer, shares go what's the problem with that.
Ron has spent his whole life working in retail. From Wikipedia:
"He previously worked as vice president of merchandising for Target and worked at Mervyns." He was responsible for bringing Michael Graves to Target in the 1990's and most of us know how that turned out.
Congratulations on your first comment. However, in this day and age, not doing a quick Google search or even checking Wikipedia to check a fact is pretty lazy.
If you don't trust us, you should at least listen to the guys that went short on RIMM years ago, at $100-140 / share. If you didn’t do that yourself then you should see what their thoughts are. One guy, Peter Misek, was the biggest bear you could think of, went negative on RIM way before anyone else and much harder ..that was smart, that is how you make money, shorting from $100 down to $6
That guy did a 180 last week. People who have been following this stock were stunned. That is why his weight carries way more weight than 95% of the analysts out there and that was the trigger for the Friday fireworks. That is the kind of stuff you need to know inside out before you short something like RIM.
Hi Luke,
Welcome from the NOK camp. The MSM8960 supports TD-SCDMA. I'm sure China isn't job one at RIM right now even though it will be a very important market. I think their first priority will be to supply those countries where they have a substantial current subscriber base of high end phone users (Europe & UK, Middle East, what's left of North America), and emerging markets where they have a dominant or substantial market position like South Africa, Nigeria, Indonesia, South America, India and so on.
A good short does a phenomenal amount of research. Based on your article and comments it is apparent to everyone here that you have done none of this. Many of us have followed RIM intensely for at least the last 6 months and some for years. RIM doesn't need to 'beat' Apple or Google to earn half of what they did 2 years ago ($6) to be a $30 stock (Thats $3 EPS x 10). And that is being conservative. If you do not dig past the headlines you will get burned every single time. There is so many layers to this company you have no idea. For example. Did you know that 62% of cars shipped with an infotainment systems run QNX (essentially BB10)? And that their market dominence is mushrooming (shipped in 15 million cars last year?) i could go on but the bottome line is doing serious research is necessary to stick with a position short or long.
Thanks for the link, good reporting from a customer perspective!
Ahhh, I agree about the details. The author probably took the time to talk to ton's of people at the ground level. Thanks for sharing Matt!
Above the one,
Most of your specific questions can be answered by reading the transcripts and watching the last 4 quarterly conference calls and presentations. As for specific shops many of the 2013 lineup have been announced already. Cosmo was announced months ago and is essentially a lingerie line and shop by the magazine. Yes, the plan is to do all of the construction in the seasonally slow first half of the year. Johnson is ambitiously calling the street 'a new user interface for retail', wider and much more interactive than an aisle.
"Traffic is not affected. The same number of people go to the store. Some areas have some product condensed a bit, but there is little impact on sales."
How were you able to determine this if I may ask?. Because this would the only impediment to improved Q1 and Q2 sales in my opinion, otherwise Johnson should have no trouble beating last year's numbers.
Okay Matt, now I am impressed. You have had your ear to the ground on this. Are you in agreement, generally speaking, on Ackman 's worst case thesis on real estate value? Wasn't he modeling mid to high 20's share value on real estate alone? Personally I am more interesting in the leveraging of their cheap square footage combined with even a slight uptick in sales/ square foot, the bar is so low.
What a masterpiece; whether you are a bull or a bear on this stock you have to appreciate this objective and meticulously researched article. This is the modern day version of Phillip Fishers scuttlebutt technique popularized by Peter Lynch, except on steroids due to the power of the internet and some very fine research.
Personally I think most people are discounting Ron Johnson too quickly. Any successful business person knows that building a thriving enterprise takes time, and a turnaround even longer. I was bullish on the stock for it's easy Q1 compatibles, but I am moving that up one quarter to Q4 partly based on this article, the recent weakness in the stock price, and the lazy research being done by most analysts following this story.
FYI Regarding the topic of this article, the latest count from yesterday's BlackBerry 10 app portathon is 8200.
I know what you mean about the media. Just check out the 'news and rumours' forum on Crackberry; tons of excitement today over the positive media attention. Many of the biggest names in tech endorsed BB10 today or were generally positive: Engadget (awesome interview with Alec Saunders at CES), Gizmodo, TechnoBuffalo, ZDnet, BGR, Business Insider. I would not want to be long Apple right now, cause 2013 ain't going to be pretty.
First of all, I have read your posts, in fact I have gone back and read enough of your posts to realize that you have logical arguments but are somewhat arrogant using phrases like "hope that helps" which is generally considered condescending in a forum like this. If you take the attitude that sometimes you will be right and other times you may have missed something important in your logic than you might be more respectful of the other posters here who might have a different slant on a topic which you may actually learn something from.
However, we all get that way sometimes and I have enjoyed this discussion on hardware security so lets all put our egos away and learn from each other.
So are you talking about ARM TrustZone being incorporated onto an AMD system on a chip processor or something that else that is not public knowledge?
That is certainly a valid argument, however when counting on the SIM card to protect the data on the rest of the device you are opening yourself up to attacks, no matter how small you believe that increased risk to be. There are tons of studies documenting the security risks for Android, but also less so iOS and Windows phone.
You may say that this is a fine point and that most consumers don't care much as the Android Malware story has been around for a while. I would agree with you at this time. However, most consumers also don't use their phones to pay for things and open locked doors yet. I am betting that more people will care about this once they start using their phone for these activities.
Even if the difference in security is actually small, the public perception of the security risk will weigh on BlackBerry's competitors. Those that want the most secure will pay up for BlackBerry, those that don't care will buy a cheap Android. Look at cars, people buy Volvo's for the safety they provide. They pay a premium for this perceived value even if there is little actual difference in the safety of modern cars. That is the power of Brand value and, despite the beating the BlackBerry brand has taken, it still is the gold standard in security
"Without going into specifics, yes, you will be able to secure your precious sensitive work documents etc. with a hardware based secure element"
Are you suggesting that I could store 16 to 64 Gigs of data on the SIM card or it's secure element chip? Because that's the amount of data on phone's these days. Wow, that would be amazing. Maybe you could point me to a link where I can find one. I did a Google search and found this info below, it doesn't sound like a SIM card can hold that much data.
"While the micro SIM is smaller than the mini SIM, its capacity for data and memory is exactly the same -- up to 128K, depending on your carrier. A SIM card always holds your phone number, when applicable, and links the device that holds it to your account with a service provider. While the SIM card in some GSM devices will also record your address book information, iPhones and iPads using the micro SIM do not. These devices save contact information to an internal hard drive instead."
Read more: What Is a Micro SIM? |
So RealMrBean,
Now that you know what a secure element chip is for, I wanted to make sure that you knew what it is not for. It is ideal for mobile payments, and other transactions requiring "Authentication, identification, signatures and PIN management"
Basically it's a way to make your malware ridden Android or Windows safe enough for it to make transactions and open doors.
However, it will not protect any of the other important data on your phone like pictures of your family, your contacts, sensitive work documents, personal documents; basically anything you would normally store on your home laptop, since that is where this whole "mobile computing" thing is going.
iPhone users don't even have to worry since Apple is the only platform that doesn't support NFC.
PS. you think BGR, Gizmodo and Engadget were tough on RIM, wait till they are done with iOS and Android. Hope that helps.