Will The Blackberry Expire?

Investment banks are known to hand out Blackberry phones to their analysts. There have been a couple of older articles regarding some banks switching to iPhones but most banks are sticking to Blackberry phones. Will this change?


Struggling BlackBerry maker …. said it will delay the launch of new phones deemed critical to the company's survival. The delay comes as North Americans are abandoning BlackBerrys for iPhones and Android phones.

Do you think that the Blackberry phone will last long, especially now that the new iPhone 5 is due to release soon? Do you think Apple and/or Blackberry are lacking innovation?

Check out the article here: http://www.google.com/hostednews/ukpress/article/…

 

We can't know how innovative Apple is until iPhone 5 drops. As far as RIM, if you ask me the last few blackberry's have been the same for like 5 years (when the Bold came out) with just minor improvements in speed.

 
dest149:
As far as RIM, if you ask me the last few blackberry's have been the same for like 5 years (when the Bold came out) with just minor improvements in speed.
Just like Lamborghini. Stuck to the same general design since the 70s and their production is down but their owners, Audi and Volkswagen, are both doing fine. Someone needs to buy RIM is they want to see it stay afloat because it's not going to last forever on its own. They just announced that their new phone won't be released until early next year, post-iPhone 5 and post-holidays - not a good sign. But, they still have $2B in cash...
 
turtles:
dest149:
As far as RIM, if you ask me the last few blackberry's have been the same for like 5 years (when the Bold came out) with just minor improvements in speed.
Just like Lamborghini. Stuck to the same general design since the 70s and their production is down but their owners, Audi and Volkswagen, are both doing fine. Someone needs to buy RIM is they want to see it stay afloat because it's not going to last forever on its own. They just announced that their new phone won't be released until early next year, post-iPhone 5 and post-holidays - not a good sign. But, they still have $2B in cash...
Audi and Volkswagen are both doing fine because they each are shelling out innovative automotive designs, and it would be a travesty to both of them if they were to stop making the Lamborghini,and although I agree with you the same general design has been the same, the new ones certainly look more sleek, although certainly not ground breaking. I imagine RIM is waiting to see what the iPhone5 is going to be coming out with so when they come out with a new phone they don't look like they are so far behind. Mistake or Correct decision? We'll have to wait and see
 

Apple hasn't really "wowed" me in awhile, I want to really see them blow people away with the iPhone 5. RIM is even worse, they are stuck in the past. A Blackberry Curve from 2007 will be the same as a 2012 Curve just a bit slower.

As for a business/work phone, I'd never chose an iPhone (or Android) if I had a choice. My business phone is strictly for email, phone calls and maybe some bbm/sms among coworkers. I don't need to surf the web, I don't need games or apps, thats what my personal phone is for. BB still has great messaging and email services and you can't beat a physical keyboard. Typing on a touch screen just isnt the same.

 
Bobb:
for email, phone calls and maybe some bbm/sms among coworkers. I .

you get bbm on your work blackberry, jealous...

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
turtles:
Bobb:
you can't beat a physical keyboard. Typing on a touch screen just isnt the same.
You're not going to be too happy come Q1 '13
I have been on the Iphone since it's inception, and I bet I can type faster on an iPhone than the average person with a BB
 
turtles:
Bobb:
you can't beat a physical keyboard. Typing on a touch screen just isnt the same.
You're not going to be too happy come Q1 '13

I was reading a bloomberg article over the weekend. It mentioned that the new BB won't have a keyboard because the prototype didn't. I don't think there has been any official announcement saying BB 10 will be touch screen only. I think the expectation that they're ditching the keyboard is a myth, but anyone else that knows otherwise let me know.

From what I understand, one is going to be like a Storm 3 or something, and then the other will be an updated Bold. I hope they don't have more than 3 models this time around not counting camera/no camera versions. It's bad enough they'd even make 3.

http://www.techradar.com/news/phone-and-communications/mobile-phones/so…

 

RIM is dead in the water...unless they come out with something revolutionary, which I would bet against. If the new Windows Phones are any good, I could see business move in that direction since Microsoft is already soaked into the business world. I know the tablets can run a version of Windows 8, so you can chug through though excel models on the go!

yellow t-shirt
 

It's hard to picture the blackberry as anything other than a dying breed. As people said earlier, they had absolutely no innovation. Their phones have been nearly identical for years. iPhones and Androids are much smoother, have a lot more functionality, and you no longer have to answer emails with "I see the request. Wait for me to get to a real computer so I can answer"-- you can just pull it up on the spot and take care of the problem.

"You stop being an asshole when it sucks to be you." - IlliniProgrammer
 

Blackberry did say they'll be focusing more on the business customers from now on instead of going head to head with Apple/Android for the general consumer market. Maybe they'll come out with a phone that meets the needs of city workers better than the other phones, but I doubt it. They're just not innovative enough and to be honest I think the design/model philosophy of their phones had reached its peak a while ago, which is why we've seen very little improvements over the past few years.

 

still think a bb is the best work phone, but quality has definitely suffered at times. I had an old curve that was sweet and went and got a piece of shit torch that im still using. I wanna move up to a new bold, they seem a lot tougher. But what do I know, i'm just a biased canadian lol

 

I think if they just focus on business and corporate users, they can at least sustain until there is a willing buyer or that the transition from BB to IPhone is mature enough before getting phased out. However, if they continue to try to compete in the retail market with IPhone or Android, they will soon burn away their existing cash and go out of business.

 

I don't see how any PE firms would be interested in Blackberry. The company is bleeding money like crazy and at accelerating pace. Their smartphone business is worthless and obsolete. The only residual values the company has left are their enterprise softwares and patents.

It is not surprising that it took a Canadian firm like Fairfax to take them private, because no U.S investors would want to touch that thing at this point. I bet the Canadian government was actively pulling the strings from behind the scene and "encouraged" Fairfax to pony up the money to buy Blackberry as a whole, because the alternative is to sell the company in pieces to strategic buyers.

This is not a good move for Fairfax. They are not a technology company and won't know what to do with dying RIM. I suspect that they might have to write down a good chunk of the $4 b+ a few years down the road.

Too late for second-guessing Too late to go back to sleep.
 
kyleyboy:
I think they're done, PE firms will probably buy them out. They are a great buyout opportunity.

Definitely a good buyout opportunity

 

I just recently got long, I think the biggest thing for BBRY going forward is how successful they are with keeping their existing users on the blackberry platform. For example, most of the MDs at my company still use blackberry phones and are now finally looking at other options (I assume this is the case for many people in the 40-65 demographic). This group seems to like the hard qwerty keyboard also and BBRY will be the only legit player with that keyboard as an option.

The analyst as Jefferies who covers BBRY has written some interesting stuff, he's been pretty bullish on BBRY as a turn around story. One thing he notes is that the sales necessary from the new Q10 and Z10 to move the needle for BBRY is very modest so if they can gain any sort of traction with these devices this thing prob goes to ~$30.

It should be an interesting case study either way.

 
adapt or die:
I just recently got long, I think the biggest thing for BBRY going forward is how successful they are with keeping their existing users on the blackberry platform. For example, most of the MDs at my company still use blackberry phones and are now finally looking at other options (I assume this is the case for many people in the 40-65 demographic). This group seems to like the hard qwerty keyboard also and BBRY will be the only legit player with that keyboard as an option.

The analyst as Jefferies who covers BBRY has written some interesting stuff, he's been pretty bullish on BBRY as a turn around story. One thing he notes is that the sales necessary from the new Q10 and Z10 to move the needle for BBRY is very modest so if they can gain any sort of traction with these devices this thing prob goes to ~$30.

It should be an interesting case study either way.

Do you have any of his work that you could share/PM? Interested in this

 
adapt or die:
I just recently got long, I think the biggest thing for BBRY going forward is how successful they are with keeping their existing users on the blackberry platform. For example, most of the MDs at my company still use blackberry phones and are now finally looking at other options (I assume this is the case for many people in the 40-65 demographic). This group seems to like the hard qwerty keyboard also and BBRY will be the only legit player with that keyboard as an option.

I've got to agree with you on the fact that BlackBerry has a really faithful userbase. However, as you said, they tend to be part of the older demographic - and this is possibly related to the fact that a BlackBerry device will get your email the second after it is sent. This will help them for some time, but you cannot expect them to fight for market share against iPhones and Androids. Without appeal to younger or new comsumers, the company cannot grow.

 

I am long BBRY. Bought some downside coverage as well. - I think, in general, consumers showed their willingness to move from iPhone and Android when the nokia windows phones were released, which bodes well for the BB10 platform, which I believe is superior. - Existing Blackberry user base is over 70mm. - I understand the dynamic of their steadily decreasing BES service revenue, which has a high marginal contribution to profitability. The company has proven it is flexible enough to downsize. I am betting they can continue to do so if necessary to mitigate margin erosion. - No debt on the BS - Some potential PE buyout interest - Huge potential strategic buyout interest...Yahoo - General quality of the new OS (yes, I've got one. and yes, I am also an iphone and android user) - Strong, widespread carrier support worldwide - Emerging market potential - widely popular brand, widely distributed product, - New phones fully adopted to BYOD corporate ecosystems - removed structural hurdle - Licensing potential - anyone think at some point some of the android makers might want to diversify away from android OS now that Google owns Motorola (I know the deal was driven by IP, but still) - Licensing BBOS margin could offset BES margin loss

BB was trading at like 2x EBITDA back in June or July, but earnings have been depressed for a while. The LTM already reflected a lot of the impact the stock was discounted for. Take a look at service revenues' decrease. Granted it will conitnue to decrease and probably go away all together eventually, but I believe there are offsetting events that the market has assigned to low a probability for (i.e. new BES licenses for BB10 balance corporate security, EM sales, licensing, etc.) Just some thoughts.

 

Don't know the stock/company well, but one pretty negative data point: they're struggling to get enterprise customers on-board with the Z10 bc it requires an infrastructure investment and their customer continues to shift to one device vs. two (personal + professional). Interesting that none of the big banks have come out with support for the Z10.

 
DontMakeMeShortYou:
Don't know the stock/company well, but one pretty negative data point: they're struggling to get enterprise customers on-board with the Z10 bc it requires an infrastructure investment and their customer continues to shift to one device vs. two (personal + professional). Interesting that none of the big banks have come out with support for the Z10.
It's actually the opposite. Legacy BB devices required a BES corporate infrastructure. The new ones run on MS Exchange/Active Sync. There is literally no required investment to integrate the new devices into the corporate IT infrastructure. However, there is an available enhancement to the infrastructure that is about the same expense as previous systems. Unfortunately for BBRY, I do not see a whole lot of adoption of this new BES. Why? Because I use my new blackberry at work along with everyone elses' androids and iphones; it works great; so no reason to buy system enhancement (BES10). If you use an iphone at work today, you can use the new blackberry. Whether or not the firm wants to invest in BES10 is a separate proposition in my opinion.
 

BBRY's main problem is a lack of differentiated innovation. Since the iPhone came out, BBRY has done nothing but play catch up to iOS and Android. And their efforts have consistently been insufficient. For example, it took almost 6 years for BBRY to release a powerful touchscreen smartphone that was even in the same conversation as the iPhone and high-end Android devices. Conversely, Apple and Google have continuously improved the user experience. For example, Apple's BBM competitor iMessage permanently erased billions in BBRY's market cap.

In smartphones, there are huge network effects. Consumers want to buy OS platforms that have large user bases and lots of apps. App makers want to design apps for OS platforms that have large user bases. The result is that no one aside from loyalists have a compelling reason to buy BlackBerries or design apps for BlackBerries.

The only thing that will save BBRY is a significant innovation that causes consumers to dump iOS and Android. The Q10, Q5, and Z10 aren't the answers, since they don't offer anything that would entice consumers to switch. And BBRY's track record suggests that Apple, Google, and even Microsoft can out innovate it. This is almost impossible in a world of rapidly declining smartphone margins as Google decides to offer Motorola phones at cost (http://online.wsj.com/article/SB100014241278873246822045785173834421993…).

I'm afraid that BBRY's done as a company. As a stock, given the huge short interest in the name, there will be opportunities to buy on weakness and profit on good news when the shorts have to cover and the bulls believe that the ship is finally turning. I wouldn't be a long-term holder of the name though. BBRY could be acquired for patents. Potential acquirers won't have to pay a premium for it though. As we saw with Nortel, acquirers can just wait for BBRY to run out of cash and file for bankruptcy before buying up the pieces.

 

The thing holding back BB10 currently is that there's NO good apps. What apps there are are usually android ports or shitty native's, and you can tell with the interface- just not smooth at all.

Lucky for me, I only use it for text, email, calls. I love it, but if anybody else offered a qwerty phone I'd probably jump ship pretty fast.

 

Correct me if I'm wrong but I think that a big obstacle is the blackberry data service that you have to pay extra just to use most of the features that are freely enjoyed by ios/android users. Obviously it was justified before when BBM was something exclusive but since whatsapp and imessage came out I really don't see much of an incentive to pay that extra money. That being said I still own a bold 9900 and am very happy with it.

I do agree that the app developing is a huge problem, but surely they could pull of the windows phone move and get all the android apps to work for blackberry os, right?

 

It's tough to see how porting Android apps is a positive for BBRY and MSFT. Such a defensive move is good for retaining market share...not for growing market share. App makers don't have much of an incentive to develop BB apps. Why spend time developing an app for a product that has less than 5% market share when you can spend the same amount of time developing for iOS or Android?

 

The stock is tremendously undervalued -

Take out a calculator

Their patent portfolio is bigger than Nortel's which sold for $4.5 bn Their cash/investment balance is $3.1 bn - 65% of the mkt cap Their service fee revenue annuity alone - even if you assume it goes to 0 in the next few yrs is worth at least $2bn

Add that up and it's double the current $4.75bn mkt cap

And that's assuming their hardware business, brand, MDM platform, BBM, QNX, and everything else on their balance sheet other than cash and patents is worthless

 
investingman99:

The stock is tremendously undervalued -

Take out a calculator

Their patent portfolio is bigger than Nortel's which sold for $4.5 bn
Their cash/investment balance is $3.1 bn - 65% of the mkt cap
Their service fee revenue annuity alone - even if you assume it goes to 0 in the next few yrs is worth at least $2bn

Add that up and it's double the current $4.75bn mkt cap

And that's assuming their hardware business, brand, MDM platform, BBM, QNX, and everything else on their balance sheet other than cash and patents is worthless

Some company's are just cursed though. People WANT to support BBRY (as shown in the January volume), but it doesn't matter what a company's fundamentally worth if no investor will touch it.

 

BBRY and Nokia are in the same category in my book. Lacking innovation and newer products (helps that AAPL only has one product line to concentrate on). Noboby becomes number one just by copying what number one is doing, so there needs to be a revolutional new product coming from both Nokia and BBRY to stay afloat.... which I can't see them doing. Only reason for me to buy BBRY is to take a punt on a MBO or selling their portfolio of patents.

CNBC sucks "This financial crisis is worse than a divorce. I've lost all my money, but the wife is still here." - Client after getting blown up
 
Where is Blackberry Going?

Straight to hell.

This company has had year after year, one opportunity after another, to cut its losses in the consumer market and refocus its effort on retaking corporate and professional user market share. But instead of refashioning its Blackberry Enterprise software, providing enhanced packet and network security to meet modern needs, and developing a phone and OS with business users in mind, they continued to half-ass some campaign aimed not quite directly at their competitors.

"We're not trying to beat Apple or outgrow Android... just take some bit of the market." Thus, we have this disgusting OS with features such as "Blackberry Hub" that are 140% novelty, along with "multimedia capabilities" that are neither useful to a professional or good enough to compete with cheaper alternatives.

The BBRY revival was the most ill-conceived turnaround since Palm, and dare I say that the Palm revival was better since they actually sold some phones. I've seen exactly ONE Z10 this entire year.

Screw Blackberry; I'm happy this is happening. Lazy management at its finest.

in it 2 win it
 
Nutella Monkey:
Where is Blackberry going?
I don't know where the path leads exactly, but the market has decided to flush this turd down the toilet.
Nutella Monkey:
We can only hope now that a miracle can save the company that once affected our daily lives.
Speak for yourself. It's a crappy product that deserves to die.
 
Nutella Monkey:

Where is Blackberry going?

no where. they missed the boat on the smartphone, and i don't see a feasible turnaround. they're not innovative enough to come out with anything groundbreaking (that could consequently be sold at a premium), and they're not able to compete on price.

they'll probably slide into bankruptcy a la kodak.

 

I can't post links yet but search Businessinsider for "secret failed plan blackberry"

I found this quite interesting a while back and I would really like to know the plans Fairfax has with the company. One can argue that it's too late and BB is already doomed but I believe if well executed, something similar to this where a smaller, enterprise focused company is created has a chance. The key here is that BB's services must become available across all devices, I don't believe in their hardware business at all. That business segment is too crowded by way better competitors.

So where is it going? Fact is that there are only two relevant enterprise services providers; Blackberry and Microsoft Exchange.

MS Exchange has a strong position because it (obviously) works very well with Outlook and all smartphones support it out of the box. My company updated MS Exchange to support bring your own device policies and I can't tell you enough how happy I am that I no longer need to use that f***ing Blackberry.

On the other hand, BB undeniably still has a solid reputation for security in the business world and I can see the place it could take in the tech space.

On the merits of this p2p, at least the valuation seems very attractive and the company has a lot of cash. It need only be stabilized and slimmed down to generate a decent return.

 

They didn't innovate. They never wanted to drop the keyboard while everyone else wanted only a screen. At least Apple changes every 2 years, while Samsung changes like every couple months.

Once I did bad and that I heard ever. Twice I did good and that I heard never.
 

The biggest flubup wasn't anything with smartphone rollout, it was with BBM. They wanted to "protect their brand" however if they rolled out BBM as an app in 2009 for Android and the App Store they'd still be relevant, very relevant. Now 4 years too late they're trying to roll out BBM as an app, doubt it works.

 

Blackberry really missed the mark on capturing non-business users. Offering upwards of 13 or 14 phones isn't giving consumers choice, it's confusing them. Look at the top market share holders like Samsung and Apple. Samsung has their flagship Note II and Galaxy, Apple has the iPhone. What does Blackberry have? A dozen plus phones no one knows the difference between. Also, their big break was the secure data network for business use (email, etc.). That's not unique anymore.

@Kassad touched on the underlying issue of lazy management. I would certainly classify them as complacent.

 

@Kassad

Not sure it's lazy management that's the problem, more like blind, as you mentioned.

Surely you have to be a complete halfwit not to see how miserable the blackberry's consumer oriented features were?

Apple and Samsung must have been laughing all the way to the bank when the Z10 came out.

 

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