BlackBerry an Alternative Reality, An Alternative Future

BlackBerryBentley10_300x225

(Check out below the video of the first car to cell call: BBM car to BlackBery Z10 phone call)

By Darryl McKinnon (edited by Fernando Commodari, Ph.D.)

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Recently I penned an open letter to the Canadian Government and members of Parliament regarding the sale of BlackBerry:

http://pfcsystems.wordpress.com/2013/10/19/a-letter-to-members-of-the-canadian-parliament/

My intention was to express my concern over the sale, to explain why I believe it’s not a just reaction to the current circumstances at BlackBerry. I also wanted to provide clear solutions instead of simply addressing the obvious problems. Perhaps understandably the process of writing the letter and the reaction to it from readers, has lead me to believe more needs to be said.

My biggest concern has always been the muted reaction from Canadians to the potential loss of BlackBerry to a foreign bidder and the reputational loss to the Canadian Stock markets & Canada as a competitor on the 1st world stage. It’s a given, if BlackBerry was to be taken over by a foreign company or even taken private, it will not look good upon the Canadian Stock Market, and on their ability to support their listings. Canada will lose a foothold in high tech/high talent jobs and intellectual IP built by Canadians, as happened with Nortel and the Avrow Arrow:

http://www.youtube.com/watch?v=eWuZtk8uPP0

The question becomes why? Or a deeper look asks, what’s really going on?

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Previously I gave examples of how Americans support their publicly traded tech companies. How they support their technology companies through their financial markets.

I provided data on how Facebook, Twitter, Netflix and Tesla among others, trade at hundreds of times their earnings. These massive multiples are amassed in part because of how the American financial system is set up to support their technology industry & other listed stocks.

Hedge funds backed up by massive media outlets provide a megaphone to the American population, extolling the virtues of said companies while simply ignoring the potentially dangerous multiples those companies trade at. The hedge funds provide the analysis and the media provide the megaphone.

American TV networks and news media protect and build value for their companies. It is often the same ownership at the helm of the media and companies being built up, with the same vested interests; the same power makers and lobbyists that offer the venture capital.

Once you take a closer look. You see the connected nature of the system. You see how everyone stands to benefit from the consistent positive spin. It’s true that the media players bring out market bears, that give the opposite view of the market and the companies we’ve been discussing. But by carefully controlling the content and ratio of positives vs negatives, the resulting perceptions are built casting a reality; all this gets to carry on as those companies with the massive valuations, far outside their ability to earn money proceed to use those funds to buy actual value.

 

Canada lacks the global reach of the American Media, and often the Canadian media just tows the line on what is fed via the American news outlets. With all levels of media being controlled by a select group of  lobbyists/venture capitalists/owners at the top, almost as a single entity, it can turn that perception machine into a force against a company. This negative analyst/media frenzy can destroy or devalue a company like BlackBerry to the point where it can be sold at “auction”  with the same nay sayers being able to buy up the pieces at half of book value.

 

All we have to do is look at the American system and how it creates value in very junior companies, even if not public yet.  As an example, PATH, a newly formed instant messaging service, started by an early Facebook employee,  someone who knows the system, knows the venture capitalists and how the media outlets can be manipulated.

PATH recently reached 10 million users of their service, some say with illegal means:

http://techcrunch.com/2013/06/14/path-is-on-the-path-to-new-funding-approaching-1b-valuation/

The financial system in the USA values PATH at $1Billion; they recently received additional venture capital funding.  Yet the book value of the company is nowhere near $1 billion dollars, most of the valuation is based on future earnings potential.
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By contrast, BlackBerry has an instant messaging system, BlackBerry Messenger. Many would argue BBM is far more feature rich than PATH. Plus, they had 60 million users previous to BBM launching on Android and Apple over the last week, when BBM was downloaded 10 million times in the first 24 hours! It was downloaded over 20 million times before the first 3 days. As I write this, millions more people are about to get started using BBM, now that there is no “line”. Yet with the current Fairfax offer that’s on the table for BlackBerry, at one half of BlackBerry’s book value, BBM is receiving a value of $0. That’s to say that BBM has zero current value or future potential value given to it by the market and analysts.

BBM Quick Facts:

 

More than 60 million monthly active users.

More than 51 million daily active users who are connecting with friends or colleagues an average of one and a half hours every day.

BBM users send and receive more than 10 billion messages each day, nearly twice as many messages per user per day as compared to other mobile messaging apps.

Almost half of BBM messages are read within 20 seconds of being received; indicating how truly engaged BBM customers are with the platform.

 

Source: http://blogs.blackberry.com/2013/05/bbm-ios-android/

BBM has recently topped the charts on iOS and Google Play world-wide!

http://pfcsystems.wordpress.com/2013/10/26/top-ios-apps/

Let’s have a look at another social media company that has yet to go public, Pinterest. Again this company is strictly funded by venture capital. They call it “venture capital” at the early stages but all venture capital is hedge funds & large bank investment arms, often the same funders that have analysts on pay rolls to “review” the market. They’re able, through their market position and ability to promote start ups, to gain early access to the companies in the US. Pinterest is valued at $3.8 billion by the US venture capital system. They have recently reached somewhere between 25 to 50 million users, depending on who you listen to, but they have yet to ever earn a dollar. They admit to not having an actual plan to make money and aren’t even worried about that, at this time.

http://allthingsd.com/20131023/pinterest-does-another-massive-funding-225-million-at-3-8-billion-valuation/

If you take these two examples alone & compare, not BlackBerry as a whole, but only BlackBerry’s social arm, BBM, and the forthcoming Channels network, I ask how is it possible that the market gives BlackBerry’s efforts zero dollar value? BlackBerry’s BBM alone, as we speak has better than 85 million users. It’s currently growing by millions a day, with users being spread over 180 countries.

BBM Channels will be an independent arm of BlackBerry’s Social Networks, although every BBM user will have access to channels through its chat feature. Channels is still in late stage beta. As a beta tester and channel owner, I can tell you that BlackBerry is on to something big here. Channels will provide businesses, consumer brands, celebrities and everyday individuals a fantastically colorful and secure and private (if chosen to go private) way to interact. The future potential is clear & valuable. Yet, the market gives Channels + BBM zero worth in the current sale of the company at half of book value.  Prem Watsa and Fairfax will get a company at “auction” with much more future earning potential than the share holders will be paid.

 

A positive article (not even considering the Channels Playcard!)  on Forbes states:

“BBM Could Be Worth Billions if BlackBerry Can Copy The Line PlayBook” –Tero Kuittinen, October 25, 2013, Forbes.

http://www.forbes.com/sites/terokuittinen/2013/10/25/bbm-could-be-worth-billions-if-blackberry-can-copy-the-line-playbook/

  QNX 

The  real value of BlackBerry, includes a world with machine to machine connectivity, a world with its subsidiary, QNX, playing an intricate role:

http://pfcsystems.wordpress.com/2013/10/26/space-grade-m2m-tech-in-the-palm-of-your-hand/

A world where smart phones will become the entry point of the connected devices. It’s early but this new world is coming up around us, more and more so, every day. First on the agenda would be automotive infotainment and drive train diagnostics.  The hands down leader in this brave new world is QNX.  The software code, Real Time OS (RTOS), behind the new BackBerry 10 OS cell phones is present in over 300 million current automobiles and their future products. QNX Car2 is already gaining mainstream acknowledgment as the industry standard. QNX is not just in automotive either. Many fail safe industrial systems rely on the QNX RTOS as the only system reliable enough to stand up to their difficult tasks. Military, nuclear and aerospace are counted among them. The F35 Lightning the Abrahams tanks the International Space Station and many of the world’s nuclear power plants rely on QNX. These vastly important BlackBerry customers are not the point though. They are an example of the power and reliability of the BlackBerry, QNX RTOS.  Again, very little press or value is given to this ownership by BlackBerry.

 

“We Aim To Be The Leading Provider of Machine to Machine Embedded Systems” -Frank Boulben- March 16, 2013

http://pfcsystems.wordpress.com/2013/03/25/we-aim-to-be-the-leading-provider-of-machine-to-machine-embedded-systems-frank-boulben/

Take QNX and couple it with BlackBerry’s Network Operations Centre (NOC) and we understand that this is one of the world’s largest networks which is connected  to over 650 mobile carriers worldwide. The bigger picture starts to emerge. BlackBerry holds the key to the largest private “secure” network there is and which is relied on by the likes of NATO the DOD the DND and many national governments around the world for its unmatched level of security. BlackBerry10 operating system & BES10, BlackBerry’s latest MDM or “Mobile Device Management” solution has recently been employed by all of them. Recently, BlackBerry launched their cloud based #MDM solution. That adds unmatched cloud integration. BlackBerry has also secured Android & IOS with BES10.

Everything ties together, BlackBerry is a vertically integrated secure mobile platform & business solution. From the hardware to the software, through the services, that include transfer of data via the NOC & BlackBerry’s network. They have spent the last 2 + years rebuilding the suite of offerings, rewriting the entire architecture of how everything communicates through the network. The foundation is now in place, and it is built for security first.  The future is at hand. The QNX RTOS has the ability to communicate with its own kind or other systems that run QNX RTOS through their “transparently distributed processing”:

http://berryflow.com/portfolio/tdp/

The connected world is coming and BlackBerry’s technology, whether Canadian or not will be at the forefront of this massive new market including military, industrial, medical and other segments.

Now is not the time for Canadians to be selling BlackBerry for half the value of their hard assets. Now is the time that Canadians should be investing in BlackBerry and investing in Canada’s future, to be at the forefront of a super-connected world.

bbq10initial01

The American system is the land of what they call “Activist Investors”.  These men and women can be worth billions; they are the venture capitalists that offer money, the key industry leaders that sit on several boards, from bank to media. They make it their business to invest in struggling companies and inact change long before the management of a company can fall so far behind in the perception game. They fully understand how a company’s perception becomes its reality.

Activist investors step in and fight to change those perceptions. At times, just the information that an activist investor has got involved in a company is enough to enact change. Sadly, Canada appears not to have any activist investors of the magnitude, technical knowledge and/ or will needed to complete the change started at BlackBerry.

In my letter to the Government of Canada, I recommended that the government request Jim Balsillie to return to BlackBerry as the CEO  to fight for the company he once owned. The company he built into a worldwide $20 billion behemoth!  Here’s hoping that Jim Balsillie or some other Canadian steps up and fights for BlackBerry to remain Canadian and public. The current CEO does not appear up to the  task of completing the BlackBerry transition.  Thorsten Heins, top management, and the Board of Directors appear to have lost their resolve to keep BlackBerry moving. That doesn’t mean that someone else can’t!

 blackberryz10stock

We live in a gloabal society and there can be alternative views fostered and developed by alternative thinkers/companies. BlackBerry has invented the global communicating hardware, championed and used by so many of industries’ titans in Canada, the USA, all over the world! There can be a real alternative to Apple, Android (Google) and Microsoft. There can be intellectual creativity from different nations shared globally! The market space is large enough to foster healthy competition! Innovation cannot happen by assimilation! To all my friends, all over the world, on #TeamBlackBerry, who fight the perception campaign daily, as best they can, I encourage you to support many of us in our bid to keep BlackBerry alive as a public, and preferably Canadian,  company. Anything can happen in a sale. You can do your part to help BlackBerry #KeepMoving, by supporting this movement. Repost this and re-tweet it by clicking on the “Twitter” or “Facebook” “button” below!  Or, copy and paste this 140 character tweet:

 

Imagine @BlackBerry M2M Tech @CTV @CBC @PMHarper @JustinTrudeau @GlobeandMail @AJAM @CNN @ABC @CBS @IndustryCanada http://wp.me/p381yl-SJ 

Here’s hoping that you will get on board with this movement and support a titan of innovation, BlackBerry, an alternative reality, an alternative future, before it’s too late. Going private will weaken the brand and the biased/unbiased media scrutiny would remain! BlackBerry needs a serious marketing strategy, and perhaps putting BBM on iOS and Android devices is the beginning of a game-plan?!

We can do this!

BlackBerry-An Alternative Reality, An Alternative Future

Darryl McKinnon.

getdjmac@hotmail.com

@getdjmac

C0007CCC8 Channels

 

Check out our most recent post on the prospective partners for BlackBerry here:

http://pfcsystems.wordpress.com/2013/11/01/blackberry-looking-for-a-mutually-beneficial-partnership/

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16 thoughts on “BlackBerry an Alternative Reality, An Alternative Future

  1. The message is absolutely true. When you talk about soda it’s Coke, baseball is Yankees, Racing Cars it’s Ferrari, Smartphone is BlackBerry they were first. Hope management dosen’t make more mistakes.

  2. This is why many companies in countries around the world have an advantage over companies in Canada. They are supported by their government. In this country we squabble and analyse anything. In the meantime the horses have left the barn, before we are getting ready to close the barn door. When will we ever learn?

  3. You’ll get more traction on this if you avoid the explicit recommendation to bring back Balsillie as CEO. He’s at fault for this as much as anybody, and for years BlackBerry benefited from that Wall Street mechanism you are criticizing.

    • The Jim Balsillie reference in the article is more of an example of the type of fighter that’s required at the position of CEO. Jim had his mistakes that’s true. But he also built a 20 billion revenue company. He didn’t do it by giving up mid way. It’s all too easy to forget the battles he won. Perhaps Jim is not the man to lead BlackBerry again. But believe me, if he stepped up with an offer to keep BlackBerry public and keep fighting. People would take him seriously.

      • Nobody has said that BlackBerry didn’t benefit from the market during the good times either.
        That’s totally besides the point of the article. I’ll be happy to debate the contents of the article.

      • He already dumped 100% of his shares. That alone should tell you that he’s out for good. Regarding the rest of the letter I tend to agree, but I don’t know what Cad.gov has to do with it. The United States bailed out Wall Street remember, with the blessing of its representatives. So it’s America itself you are complaining about, and there is no enforcement on Wall Street anymore.

    • I too was not very keen with this part of the post, and argued it with Darryl, but I agree that Jim is driven once he sets his mind on something, like trying to get an NHL team to his hometown! He makes for a good example of what is needed! This is the kind of resolve and drive that I thought Heins demonstrated for a time, until now he appears to be giving up! We need an activist investor with resolve, and for all his failings that one might argue, Jim had “Balsillie’s” ;-)

      As for your other point that BlackBerry benefited from the same Wall Street practices; I cannot really say, as I did not follow BlackBerry then. It may very well be true that to some degree Bay Street has the same unscrupulous bankers, analysts and media lobbyists as Wall Street. The question is whether “shorting” stocks at such large volume trades should be legal. The issue is whether a company can be so targeted with biased, and often unsubstantiated “analysis” and “reporting”, often from the same vested interests, for profit, driven by the shorting agenda and other agendas, such as purchase of the same company by the same media outlets (Google, as an example dominates what people “see” and find on line and also owns a competing platform–should this even be legal?). No doubt, BlackBerry and present and prior management made mistakes, but what about the indirect “influencers” on the company?

      I should point out, as I have in the past on this Blog, that I am long on BBRY as is Darryl. (F.C.)

  4. I’m surprised.

    The author has made some tremendous points, that have been apparent to myself and I’m sure others.

    Surprisingly it’s taken this long to be revealed and exposed in a coherently clear manner.

    Media has been a driver of dreams and destruction for as long as people could hear and see, but in today’s world it permeates our lives and supersedes common sense.

  5. Comments from a Crackberry forum:

    “Best ” way forward” article I have read. Excellent write up, thank you.
    Why, why, why can’t bbry do this type of communication for themselves?
    BBM is obviously on the cusp of of greatness, but not a cheep out of Boulben’s team. They should be shouting this from the roof tops. It’s enough to make you weep.
    Damn it, stand up and fight.” –CairnsRock

    “Wow, it brought tears in my eyes.” –Sexy Sadie

    “Bravo. That one deserves several re-reads to digest.”–southlander

    “Well … I guess the current shareholders need to vote against any privitization deals. No offense, but I really don’t think we can expect the Canadian government and the media to do much to save Blackberry and its public listing on the exchange. Would love to see that though.
    I really enjoyed the article and re-tweeted it (although I just joined twitter recently and not sure how much it will help).” –JuiciPatties

    “The nationalistic card is always played when company’s run into trouble. In the profitable times its all about shareholders and profit margins. We’re they thinking Canadian when they were outsourcing /off shoring like there was no tomorrow ? Nah didn’t think so…”–sixpacker

    “One tiny perceptual mistake, BBM is not undervalued, but PATH and Pinterest (like Twitter, Facebook, et al.) are overvalued. If you make no money you should not be valued over a billion, that’s just ridiculous.”–Have_a_nice_day

    “If you sell people’s information and traffic to Big Data, you can be very valuable. Not sure if Pinterest information is shared, but it’s possible. BBM is private, and that does lower the face value. Until BlackBerry monetize channels.
    Very good article. As a Canadian, I rolled my eyes at the Fair For Canada campaign to keep Verizon out. No one stands up for BlackBerry? Where’s the campaign to keep Canadian technology and jobs? It’s like Avro, all the talent will leave if the company sinks.”–black.rhino

    “This fight Is not over yet. In Canada if the population speaks loud enough the government moves.
    It’s true. If BlackBerry gets sold, nothing is secure. Even Prem Watsa will most likely sell some of the company off to fund the purchase. BlackBerry is BlackBerry because like the article states. It’s an end to end solution.
    I have tweeted and shared this write up everywhere I can. It’s not over till its over. Its what happens now that decides BlackBerry’s fate!
    If you want to make a difference, if you want to #KeepMoving share that article. If you live in Canada. Share it with your government.
    BlackBerry is not late to market. Their early!

    Posted via CB10″ —–Dapper37

    http://forums.crackberry.com/news-rumors-f40/article-blackberry-alternative-reality-alternative-future-866458/

  6. Wow such a well written and passionate article, I have wanted someone to write this (I wanted to but don’t have the writing skills), since the blackberry bashing started. Come on Canada support a true technology innovator, don’t allow blackberry to become the next Avro Arrow or Nortel. Thank you for the excellent article!

  7. Pingback: BlackBerry: Looking For a Mutually Beneficial Partnership | pfcsystems

  8. Pingback: Space Grade M2M Tech in the Palm of Your Hand | pfcsystems

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