Blackberry won’t be in the Black, but will its earnings give it a Black eye?
Of course it may well be me who will get a black eye here…
First let me say that I think that management has done a pretty good job at getting the company operationally under control, focused and accountable. The challenges in front of the company now, are all about market execution. In that regard, I think BlackBerry likely has more pain in front of it before it can realize any potential gains.
Some of the issues that BlackBerry face include:
1. A mainstream and industry media who frankly worry more about site traffic and ”clicks” than real, if not investigative reporting and facts. The recent fiction about BlackBerry’s status with the U.S. DoD and U.K approval authorities are two cases in points. The feeding frenzy on Apple lately, is another.
2. Blackberry worries too much about Apple and not enough about Samsung and Microsoft-Nokia. By 4/1, I get more inquiries from enterprise organizations about these two companies than Apple. The same is true when I’ve informally surveyed MDM/MAM/EMM solution suppliers. Part of this has to do with the already large adoption of iPhones and iPads in the enterprise. Support is assumed and widely in place via LDAP and ActiveSync and/or any number of MDM suppliers. BlackBerry needs to skate to where the puck is going. I thought all Canadians knew that.
3. The Z10 is a Gen1 device. The Q10 is still a fantasy. BlackBerry needs to accelerate its new product release cycles. And the company needs to innovate and deliver the highest levels of quality. No more crappy cameras; Longer battery life, not shorter; Best in class audio; Solid, high quality applications, not Android phantoms. Etc.
4. BlackBerry CEO Thorsten Heins needs to find himself a charismatic president to speak for the company. I’m sorry sir, but I’m in pain every time you try to be cool. It feels like watching a club singer in a SNL skit on a floating motel 6 that is masquerading as a cruise ship. Just be you.
Earnings will be released in a few hours. As I said, I think the company is likely to face more pain before things can, or might get better. We’ll see. My personal takes on what to expect…
- z10 device sales around 700k
- z10 ASPs ~550
- Total revenues at 2.485B (just inside the projected range)
- Expect service revenues to be down by 22% and software revenues to be down 10%
- This would put EPS from ops into the -.75 cent range, below consensus.
Other things I will be listening for:
1. What plans does BB have to grow the software and licensing side of its business which traditionally has been only about 4% of its revenues.
2. What does BB intend to do make up for its expected drop in service revenues (~30% of biz), especially as it looks to retire BIS and it changes the way it accounts for active consumer and enterprise service subs. Keep in mind one no longer needs use/own/subscribe to a BES because the new BB10 devices support ActiveSync.
3. is the Q10 on track for release – when, where, what price?
4. Any other new devices? Tablet?