Seeking Alpha

BlackBerry falls; DoD states no new phone orders placed

  • In a statement provided to The Verge, the DoD says "absolutely no new orders have been placed for new [BlackBerry] devices" as part of its implementation of a new apps/services management program.
  • BlackBerry (BBRY -5.7%) shares rallied on Tuesday in response to a DoD statement that mentioned its program currently supports 80K BlackBerry phones (and just 1.8K Android/iOS devices), but never confirmed any new phone purchases.
  • It's worth noting that even if the DoD had purchased 80K new BlackBerry phones, the sale would be equal to less than 2% of the company's estimated November quarter sell-through of 4.3M (down from an August quarter level of 5.9M).
Comments (75)
  • it's irrelevant because BBRY is transitioning to software services.
    23 Jan, 01:15 PM Reply Like
  • Gee where have I heard this before? http://seekingalpha.co...

     

    Haha, thanks S/A for the clarification!
    23 Jan, 02:46 PM Reply Like
  • still have the Citron report and that it was accurate in that Airwatch was taken out at 1.5 BILLION when Blackberry BES10 is three times as large as Airwatch, Good and the other MDM combined. That plus you had the sale of real estate. So how much the X phones had to do with it when blackberry is de emphasizing the phones is certainly debatable.
    It shows one thing--lot of headline traders on blackberry and we have certainly known and seen it.
    23 Jan, 03:18 PM Reply Like
  • nevertheless Airwatch is growing at a rapid rate whereas Blackberry market share continues to fall at a rapid rate.
    23 Jan, 04:22 PM Reply Like
  • Lyogi,

     

    If you read the DOD press, it's not even clear DOD are even utilizing BBRY MDM at all. It sounds like Ernst & Young, BBRY is out of sight, out of mind.
    23 Jan, 05:22 PM Reply Like
  • I believe the DOD are constructing their own network so you are probably right. But my bet is on BES revealing itself to be the cream of the crop and becoming the standard platform for any organization serious about security.
    23 Jan, 05:43 PM Reply Like
  • @Mr. Knowitall,

     

    You are correct. This link http://bit.ly/LylCRs was provide numerous times throughout the discussion and folks still got is wrong.

     

    The ringing endorsement was in the fact that the DoD still have not managed to get their system up and running (maybe May?) and very well could be going with BES10, IMHO.

     

    Anyway, BB10's are headed their (DoD) way, along with the latest "other".

     

    Say, it's good to see you having fun out here.
    23 Jan, 05:43 PM Reply Like
  • http://bit.ly/1aNE6GB

     

    see above Link Yogi where N4BB on Jan 20 clearly pointed out that the 80000 blackberry phones were the old ones already in use and not a new order
    23 Jan, 07:59 PM Reply Like
  • It is very relevant. I am a huge BlackBerry fan but was concerned all along when other BlackBerry fans looked at the original DOD announcement so positively. It is relevant because it appears supporting BlackBerry devices is necessary evil as they have so many devices that cannot be easily replaced. This shows that the new management system supports BB mainly for backwards compatibility purposes. We can't even say that they have upgraded to bes 10. The management system I am sure has bes support as part of the solution but we can't know for sure what version.
    BlackBerry fans should not have jumped all over the original news so positively. I didn't and will not till I see definite commitment to BES10 and new handset orders of BB10 in some form, even if it makes up less than 5 percent of the DOD new mobile device orders. By the way it would be great if BlackBerry can release a new special BB10 based security only device for govt and other regulated organisations
    23 Jan, 09:13 PM Reply Like
  • David, you have it backwards.
    But anyway, you probably already knew that.
    23 Jan, 09:28 PM Reply Like
  • Yogi, quote from N4BB article WRITTEN ON Jan 20:
    "It’s important to note that these 80,000 smartphones are, in all likelihood, existing BlackBerry devices, and not new ones. A report by FederalTimes points out that the Pentagon already has around 80,000 BlackBerry smartphones in its networks, so this may just be a direct transfer from one program to another. Nevertheless, this news is important because it shows the U.S. government will continue to support BlackBerry through its hard times going forward despite all the pressure from Google and Apple to make a switch."
    23 Jan, 11:09 PM Reply Like
  • Yogi, quote from N4BB article WRITTEN ON Jan 20:
    ------------------"It’s important to note that these 80,000 smartphones are, in all likelihood, existing BlackBerry devices, and not new ones. A report by FederalTimes points out that the Pentagon already has around 80,000 BlackBerry smartphones in its networks, so this may just be a direct transfer from one program to another. Nevertheless, this news is important because it shows the U.S. government will continue to support BlackBerry through its hard times going forward despite all the pressure from Google and Apple to make a switch."
    24 Jan, 07:57 AM Reply Like
  • DOD has no other choice but to go for BB sooner or later.

     

    http://bit.ly/1dLJRBX

     

    http://zd.net/1gD04Nk

     

    http://bit.ly/1dz2FcT
    24 Jan, 01:49 PM Reply Like
  • ContrarianWise, here's what you need to know: http://bit.ly/1cd6xib
    24 Jan, 10:34 PM Reply Like
  • The point is that the phones are good enough for DOD standards - that's why the stock rallied. Not because people were misconstruing the news as the DOD placing an order for 80,000 phones.

     

    LOL, come on people.
    23 Jan, 01:20 PM Reply Like
  • C'mon, do you really believe the stock rallied because the phones are good enough for DOD? That was already known, what was not known was whether they will continue to be their customer. Seems this one is still unanswered after the rebuttal. This is negative news.
    Now rambling a bit, I never understand people who try to spin negative news around. It's not something about you personally, it's just a stock.
    23 Jan, 01:48 PM Reply Like
  • ciolan,
    if I remember correctly you got out around 9, I said you left half of the money on the table.
    What do you care positive or negative? :)

     

    It dipped under $10 today, I want to pick up more, have order at 9.81, was off by few cents, damit.
    23 Jan, 02:43 PM Reply Like
  • Congrats, I remembered your call as I saw the stock moving upwards. I did get in for more from 9.75 to 10.48, but small position.
    I'm not very experienced as a trader, and everything seems to happen so fast. Like, very fast. But I still have nasty scars from BBRY so I will keep my positions small and defensive, even if that means leaving plenty of money on the table. You seem to have bigger risk tolerance, that served you great until now, congrats once again!
    23 Jan, 02:49 PM Reply Like
  • ciolan,
    Thanks buddy, such a nice post, sorry if I sounded harsh, just for that I'll give you a tip..
    if you like small bets look at SMT, small Canadian tech with amazing product, interactive smart touch-boards, my company purchased few units, everyone loves it. I think you will double/triple your money, keep it small and get in under 2.5. Try to get closer to $2, it will be volatile so hang on to your pants :) . Good luck.
    23 Jan, 03:13 PM Reply Like
  • Thanks, I'm checking it :)
    23 Jan, 03:37 PM Reply Like
  • Wow, people jumped on this news?
    23 Jan, 01:21 PM Reply Like
  • The Verge always posts bearish articles on $BBRY... just trying to get the price down...
    23 Jan, 01:22 PM Reply Like
  • The iVerge
    23 Jan, 01:23 PM Reply Like
  • DoD's lost for not upgrading.
    23 Jan, 03:52 PM Reply Like
  • DOD is using the enterprise software/services. John Chen has said the system will support a BYOD environment. Shorts still focusing on hardware/phone orders...who cares? Read John Chen's letter and you'll see his strategy is not centered on devices...hence - he sold the handset business to Foxconn
    23 Jan, 01:37 PM Reply Like
  • ken, nobody sold the handset business to foxconn.
    23 Jan, 02:50 PM Reply Like
  • he did not sell it to Foxconn he gave it to them free. So now Blackberry is just focusing on enterprise, whereas all rivals are into it also. I believe Blackberry has just degraded itself by losing the hardware division. Rather then designing a killer handset Blackberry gave it up. This proves that Blackberry has absolutely Zero innovation whatsoever.
    23 Jan, 03:51 PM Reply Like
  • you are absolutely correct Mr. Knowitall Blackberry gave it away absolutely free.
    23 Jan, 03:52 PM Reply Like
  • You're deluded. Have you actually read the earnings call transcript. Don't distort. Blackberry will continue to design its phones.
    23 Jan, 05:58 PM Reply Like
  • yeah right
    23 Jan, 08:04 PM Reply Like
  • @Ken31,

     

    DoD is "not" BYOD. DoD issued devices only. NSA approved.

     

    I swear, don't start another rumor.
    23 Jan, 09:28 PM Reply Like
  • @David

     

    BB should absolutely focus on enterprise, because they have to. Sorry that BB didn't make a phone that shoots laser...yet.
    24 Jan, 02:02 AM Reply Like
  • Blackberry has been manufacturing its phones itself, it will now outsource the manufacturing, like, for example, Apple does. There hasn't been any change in the design dept afaict.

     

    This change will allow blackberry to close/sell plants reduce costs, and leave that to specialist foxconn.
    24 Jan, 07:51 AM Reply Like
  • Yes I agree with you. But we need to know if they upgraded to BES10 or not? Right now all they need is BES to support these legacy devices. The new device management system may have been upgraded to support new devices such as apple and android and maybe windows. The new secret management system could be comprised of other Vendors' systems, with a passthrough the BES for Blackberry legacy device support. If it is not BES10, then DOD has no plans to upgrade their Blackberry devices as BB10 devices cannot be supported by BES. However, if the new management system includes BES10, then at least there is a chance that BB10 is part of their future plans. Worse news would be that BES10 is not part of their enterprise solution. This is the key questions that needs to be answered as far as I am concerned.
    27 Jan, 03:22 AM Reply Like
  • @vijitc,

     

    "The new secret management system could be comprised of other Vendors' systems, with a passthrough the BES for Blackberry legacy device support. If it is not BES10, then DOD has no plans to upgrade their Blackberry devices as BB10 devices cannot be supported by BES."

     

    Excellent point!
    This will be something to watch for.
    27 Jan, 02:42 PM Reply Like
  • The news was never "new" orders. That was pointed out so many times. But, the general public just doesn't follow SA close enough.

     

    Go BlackBerry. The BB7 still chosen over iOS7, Sammie, and other.

     

    The "new" BB10 will be purchased for DoD going forward. But Verge just happened to omit that little tidbit. I have a link for those that are interested.

     

    http://bit.ly/1e9INuB

     

    Once the system is running, the latest iPhones, iPads, BlackBerry 10s and other commercial devices certified by DISA will be allowed onto Defense networks. 
    23 Jan, 01:44 PM Reply Like
  • nope I heard the DOD was going to purchase I-phones and I-pads as to support their own country.
    23 Jan, 02:46 PM Reply Like
  • @David653,

     

    "nope I heard the DOD was going to purchase I-phones and I-pads as to support their own country."

     

    ...and support the Canadians by 98%. 2% support is not bad.
    23 Jan, 02:50 PM Reply Like
  • Hi Cliff,

     

    where do you get that new BB10 devices will be purchased for the DoD?

     

    The article you linked contains one mention of BlackBerry as you noted, but I will double quote here again for clarity:

     

    "Once the system is running, the latest iPhones, iPads, BlackBerry 10s and other commercial devices certified by DISA will be allowed onto Defense networks. "

     

    Nothing about any new BB10 purchases.
    23 Jan, 02:53 PM Reply Like
  • Like that is going to happen! There is a BAN in iPads even being in the room when there are foreign talks going on.

     

    To assist everyone with their cloud storage solutions, protected of course, BBRY announced a QNX cloud service.

     

    http://bit.ly/1dYRrgp
    23 Jan, 04:02 PM Reply Like
  • I read the article Crispin, "QNX Cloud business."

     

    I actually love it; a new non-revenue producing money sink :)

     

    But seriously, there is no mention of revenue generating capabilities. They got all the right buzzwords in there, but no meat.
    23 Jan, 05:22 PM Reply Like
  • @Mr. Knowitall,

     

    http://bit.ly/1ehvcyA

     

    A number of places "indicate" that the DoD will purchase, iPhones, BB10's (the latest stuff) and other mobile devices. The system was designed specifically to handle "above' hardware. The link here also gives you more insight into the uncertainty of the system. It's very much up in the air. They are prepared to scrap it and try something else.

     

    "In late June, the Defense Department signed a $16 million three-year deal with a trio of contractors to secure 300,000 commercial devices, including iPhones, iPads, Samsung gadgets and BlackBerry 10s. USDA late last year hired the same vendors to provide a similar type of security package."
    23 Jan, 05:54 PM Reply Like
  • Bloomberg seemed to carefully avoid clarifying that the 80,000 BBRY devices did not include any BB10 devices (though the article pictured a Q10).

     

    http://bloom.bg/1jk5Ib5

     

    Nor did they specify the makers of the DoD's new system (Fixmo) offered their own MDM solution...Therefore even BES10's MDM wasn't a primary factor in the security of DISA's new system.

     

    IMO: That whole story sounded very 'crafted' and limited to pumping BBRY

     

    In the interim we all still wait to see what the other 218,000 devices will ACTUALLY be on the DoD's newly provisioned capabilities for 300,000 devices.
    23 Jan, 02:16 PM Reply Like
  • @JoFergus,

     

    Actually, the new system was put into affect and was not working. I think they had about 1100 devices on it. So, the iPhone and other devices were not able to be protected by the new system and those users were told to get their older version Blackberry's and start to use them again. DoD currently uses BES to protect all Blackberry's with no security concerns. They plan to "test" the system again at the end of the month with an even larger number of devices.

     

    We are holding out "hope" that they can get it done? No track record.

     

    DMI was given the contract, not Fixmo. Fixmo is part of the patchwork of companies "trying" to do was BES10 can do. I'm betting on a "fail" by the US Government again.

     

    Do an little trolling on nextgov.com on Blackberry, it will set things straight.
    23 Jan, 02:39 PM Reply Like
  • Did the trolling on nextgov.com, found this:

     

    "Once the system is running, the latest iPhones, iPads, BlackBerry 10s and other commercial devices certified by DISA will be allowed onto Defense networks. " http://bit.ly/1e9INuB
    23 Jan, 02:56 PM Reply Like
  • Samsung bought a stake in FIXMO

     

    http://ubm.io/1dSCQ7N?
    23 Jan, 03:24 PM Reply Like
  • Thanks for that Cliff
    I knew they were contracted to supply Mobile Device Management and Mobile Application Store (MDM/MAS) capabilities, and should have known that there would be more to the DISA system than just those components. I had thought that DMI was just managing the project, thanks for the added view of the role of DMI.

     

    I'm thinking that Samsung will be hellbent to get Samsung KNOX safely out of the woods onto the road, and anyone who follows BBRY should definitely also be keeping an eye on Fixmo's government work as well.

     

    BTW: All I know about Apple when it comes to .gov contracts is that they are finally going to start building iOS devices in the U.S. - Presumably to get around the GSA regulations that should have kept (non TAA) foreign built hardware out of government offices to date (at least when domestic options were available).
    Note that China is not on this TAA list, but to the best of my knowledge no other parties ever filed proceedings to keep Chinese made iOS devices out of the US government based on this regulation.

     

    http://bit.ly/1eht8a5
    23 Jan, 05:38 PM Reply Like
  • Bought long calls. Thanks for the drop today.
    23 Jan, 02:20 PM Reply Like
  • No position, absolute typical BS manipulation of $BBRY stock, the news I read yesterday did NOT once say they SOLD 80,000 units......will it ever stop? I'm from waterloo GO BBRY!!!!!
    23 Jan, 02:30 PM Reply Like
  • Hi fishonov,

     

    You're right, the DISA report never said they sold 80,000 units. http://bit.ly/1dV4ijO
    But certain Authors--and some here at S/A--were spinning this report in such a was as to make it sound that the DoD was endorsing BlackBerry, or that the DoD was deploying 80,000 phones, or that the DoD report supports BlackBerry ... all sorts of positive spin, when there was in fact nothing positive mentioned about BlackBerry.

     

    The fact that DoD has 80,000 legacy BlackBerry devices is not news, period.
    23 Jan, 03:02 PM Reply Like
  • Hello Mr Knowitall,

     

    you are correct as well, BUT, in no way at all can an article from SA move $BBRY stock the way it did yesterday! IF that were the case there was a LOT of oblivious reading yesterday and in todays case people were paying a lot more attention to something that is just smoke! the key word is SUPPORT!!
    23 Jan, 03:10 PM Reply Like
  • Of course they were spinning it as sales. Here is one the states it as fact.

     

    http://cnb.cx/1hPgp2E__source=msn|money|hea...
    23 Jan, 03:31 PM Reply Like
  • fishonov,

     

    Right, unlikely that S/A moved the market, but hundreds of news outlets can.

     

    BlackBerry gets major boost from Pentagon, share price surges http://bit.ly/1dZ7qv4

     

    DOD’s mobility plan a boon for BlackBerry http://bit.ly/1dZ7o6m

     

    Blackberry stock surges on 80,000 unit “government bailout”, Android still activating 1.5 million daily http://bit.ly/1dZ7o6p

     

    more here http://tinyurl.com/o2e...
    23 Jan, 05:48 PM Reply Like
  • Chen's 20,000 shares are at a price under $9 I was just saying to myself today I think this guy is awesome and I wish I could get in with a price closer to what he paid....
    23 Jan, 02:31 PM Reply Like
  • Just something represented as the truth when it is really not quite true and the verge has never been half bullish on blacberry in fact i am surprized they did not write something negative before today
    23 Jan, 02:41 PM Reply Like
  • There were many shouting from their rooftops here the other day about 80000 handset purchases. Now the tone is how stupid is the general public for thinking there was 80000 handset purchases. If this is the extent of the pullback it's good for everyone.
    23 Jan, 02:49 PM Reply Like
  • Howie,
    My friend, no one gives rat's behind about 80K phones, this number will not make much difference any way. However the fact that Pentagons new network will be 98% Blackberry means a lot.
    They will be upgrading this phones as needed.
    Blackberry goes to $18 and that's that.
    23 Jan, 03:30 PM Reply Like
  • $18.00.... so modest.
    23 Jan, 03:57 PM Reply Like
  • That's right, it is modest, because it is only short term, by mid summer.
    Longer term $30, by end of 2015 or sooner.
    23 Jan, 04:18 PM Reply Like
  • "My friend, no one gives rat's behind about 80K phones"

     

    Everyone cared yesterday http://tinyurl.com/o2e...
    23 Jan, 05:52 PM Reply Like
  • i placed a sell puts order and was not filled yesterday. today i did a market order at as soon as i got a minute.

     

    sometimes longs need some negative "news" to pick up more shares or long options on dip...
    23 Jan, 03:25 PM Reply Like
  • 1.25 BILLION in re finance money thanks to TH pegs it at $10. That is pretty much where we are now. They would not have put in the money in the first place if they didn't think it was worth $10 at the time. The CITRON REPORT has been vindicated with Airwatch being taken out at 1.5 billion.

     

    If blackberry BES is truly 3X as large as air watch, good and the other--then wow--that alone would justify the share price not to mention the 3.5Billion in cash and BBM--smaller than whats app but that is valued at 11 billion according to Citron report--a hedge fund known for shorting stocks and not often or very seldom long on stocks.
    23 Jan, 04:15 PM Reply Like
  • The Verge just enjoys putting it to Blackberry whenever it can. Whether incorrectly reported or just misunderstood, 80,000 phones wouldn't change anything on BB bottom line. Investors know this. If it was the case, the stock would have gone up by much more than it did.

     

    The Verge is just trying to keep up with its namesake, the inside of the anus. (don't ban me cause I'm pseudo facetious-look it up!)
    23 Jan, 04:41 PM Reply Like
  • Hollywood got nothing on you 105 as far as entertainment
    23 Jan, 05:57 PM Reply Like
  • "BlackBerry falls; DoD states no new phone orders placed"

     

    And where did it ever say that new phone orders were placed? It was all speculation. Either way, they are amounting to approx: 300,000 smart phones eventually for everybody. I can see new BB10 device orders coming along with the replacement of those older 80,000 BBOS phones.
    Also to point out, a testament to how secure BlackBerry truly is, here we have old BBOS phones with higher security than the so called newer iOS and Android OS's. Humm, interesting.
    But a simple fact both Android and iOS are flawed when it comes to the Enterprise.
    23 Jan, 05:34 PM Reply Like
  • the Israeli report said Knox had crummy security
    23 Jan, 05:58 PM Reply Like
  • Ellas,
    check out my post below, N4BB clearly stated that they were old phones--the misrepresentation and fallacy apparently came from SA 's speculation as to why the price "surged" and today's speculation as to why it "fell"
    23 Jan, 10:42 PM Reply Like
  • http://bit.ly/1aNE6GB

     

    N4BB clearly stated that the 80000 phones were old phones and made a point to so state on Jan 20--so anyone who could read had this information. Further, the quotes and following article below stated that Blackberry would manage the phones and that also the bar was quite high for security clearance but BBRY clearly made it.

     

    read it above in the above link--quite clear and old news--no misrepresentations at all
    23 Jan, 07:58 PM Reply Like
  • contrarianwise,

     

    In response to the S/A post: "BlackBerry surges after DoD provides vote of confidence"

     

    You had this to say: "don't want to get to excited but the 80000 phones may be the tip of the iceberg." http://seekingalpha.co...

     

    You seem to have fallen for the "vote of confidence" misrepresentation just like a lot of other readers.
    This is why there has been a clarification.
    23 Jan, 08:18 PM Reply Like
  • thanks for pointing that out Mr K. Several articles were apparently misleading and I must have found one of them. In checking recently I noticed that indeed the article I cited N4BB clearly stated that the phones were not new--so I either read that article wrong or another one.
    Also apparently people did pick up the wrong information because one article I read said 800,000 phones were sold--I'm glad I didn't mention that one--I knew that just didn't sound right.
    I also re read the announcement and on its face it is terribly confusing--so I'm not sure any misrepresentations were intended as the Verge intimates.
    23 Jan, 10:36 PM Reply Like
  • Mr K, Here is the quote from N4BB, Jan 20--no spin at all but anticipating the confusion:
    "It’s important to note that these 80,000 smartphones are, in all likelihood, existing BlackBerry devices, and not new ones. A report by FederalTimes points out that the Pentagon already has around 80,000 BlackBerry smartphones in its networks, so this may just be a direct transfer from one program to another. Nevertheless, this news is important because it shows the U.S. government will continue to support BlackBerry through its hard times going forward despite all the pressure from Google and Apple to make a switch."
    23 Jan, 11:11 PM Reply Like
  • Mr K---LT had a good post on your mini blog on the issue--thought I'd pass it along for your readers:
    It's awfully difficult to find a negative for Blackberry in the news release. I think the way the market sees it is as follows:

     

    Given that the DOD, over a year ago, indicated a goal of opening up their networks to Apple and Android devices and has been working with Apple, Google and Samsung to that end (and I'm sure those companies have been working hard to get in there too) why is it that only 1800 devices are Apple or Android devices while 80,000 are Blackberrys? And this is only at the Unclassified Level. There must be something superior about Blackberry's security solution. And that must be compelling DoD to reconsider it's plans.
    24 Jan, 08:53 AM Reply Like
  • Wow. Sure wouldn't want anything good about BlackBerry to get out. The Verge and Seeking Alpha Sure jumped to squash that rumor fast lol!

     

    It's about the security of the software, not that some handsets were sold. Wow.
    23 Jan, 08:35 PM Reply Like
  • that CITRON REPORT SAYING BUY WITH A $14 target really calls it all out--says it is a "enterprise and software" company and totally dismisses it as a device company entirely and places a $14 target on those businesses alone...With the DOD getting BBRY to manage the phones I'm not so sure Citron is off at all--tip of the iceberg like I was saying.
    23 Jan, 10:46 PM Reply Like
  • @Blackjack,

     

    Yes, BlackBerry gets no free pass. Go straight to jail!

     

    I would hope 2014 sees longs and shorts keep it real. I have a lot "resting " on BlackBerry. Trading on investable facts (no half trues/lies) will save some guy his nest egg. At least we can make stupid choices, not stupid mistakes.

     

    Good fortune to all.
    23 Jan, 09:40 PM Reply Like
DJIA (DIA) S&P 500 (SPY)