At 2pm EST, on March 28, 2013, CEO of BlackBerry, Thorsten Heins appeared on CNBC to discuss BlackBerry’s earnings beat. He stated that BlackBerry has a profitability engine in place now, and with larger sales volumes will come larger profits. BlackBerry has become profitable again in just one year. When asked about cash burn, Thorsten stated that they have always had their eyes on this, but they need to invest in ramped up Z10/Q10 production and marketing in the upcoming Q1 for 2014. As for the subscriber loss, the decline is associated with fewer legacy devices being produced and sold as the company emphasizes its new BB10 offerings. BlackBerry has a loyal base to which it is offering a clear, precise value preposition for consumer and enterprise clients to move on.
When asked about so many people betting against BlackBerry on the market, the CEO replied that the proof is in the performance of the company, which is returning to profitability and turning things around with the new product offerings here now and to come later this year. The commentator asked if with the attractive new unique platform BlackBerry is being courted by other companies. Thorsten said that this is not what he was on interview to discuss, and that such decisions would be made with the board, in light of the latest results.
When asked if he regrets his comment on the iPhone platform starting to look old, he replied that the comment related to the user interface, which on BlackBerry is completely new with peek, hub, and flow. When people get to play with the device they like the unique and newest/re-invented OS and re-engineered hardware.
When asked about the number of in-channel devices selling, he stated that 2/3 to 3/4 selling is good as one needs to have inventory in-store.
As for BES 10, it is on target to roll out soon. Already 4000 corporate clients have adopted it of the 8000 in testing.
As to why the Z10 is out before the physical QWERT Y Q10 and reviews stating that it does not take rocket science to see that the Q10 should have gone in store first, Thorsten jokingly replied that he has a Ph.D. in Physics, so he knows a thing or two about rocket science. The reasons the Z10 came out first are 1)to stop the bleeding in the touch cellphone market before the BlackBerry brand lost all of its consumer recognition in this area and 2)to technologically develop a touch keyboard that matched the physical keyboard that people associate with BlackBerry.
The moderators seemed to feel that the growth story was missing with the loss of 3 million consumers. If this continued it did not look good. It seems no one cared when BlackBerry gained up to 80 million consumers, but now the number of consumers lost as the company turns over from legacy to new BB10 devices is being made an issue by some in the the US media, in spite of the earnings beat!
It is notable that the stock was up near 2%, after the earnings call, before the Good Friday break from trading, but now appears to be ending down near 1.5% by close (3:30 pm) of the trading day on both NASDAQ and TSE. Nokia is down near 1.4% and Apple is down 2.21%. By close: