Nokia Stock On Upswing As BlackBerry Rides the Storm

Nokia Stock Price (above)

BlackBerry Stock Price

It looks like Nokia Corporation is making new Tablets and phones for 2014, according to what we read in the article below.  The stock is at near $8.00, closing at $7.94 (NYSE ADR ) while BlackBerry (BBRY on NASDAQ) has been coasting at $6.50, where it bottomed September, 2012. That BlackBerry has been at near $6.50 for ten days may well mean that it will only go up from here. Here’s the story on Nokia:

Nokia Corporation (ADR) (NYSE:NOK) is going to launch new handsets in 2014

“Boston, MA, 11/13/2013 (wallstreetpr) – The new handsets and tablets belonging to Nokia Corporation (ADR) (NYSE:NOK) are going to be much faster and unique as compared to the present models available in the market. After Nokia Lumia 1520, the management of the Nokia Corporation announced that they are going to launch Lumia 2020 and Lumia 1820. According to the information made available from Nokia Power House, the Nokia Lumia 1820 is going to be thin, metallic uni body and lytro style. This handset of Nokia Corporation is going to be launched at the MWC 2014. This phone is also imaged to be the next Nokia Corporation’s flagship device.

Much information has not been made available related to the Nokia Lumia 1820, but there are rumors that this phone is going to be the first Microsoft smart phone. Microsoft Corporation is going to unveil their first smart phone with the help of Lumia series and this handset is also rumored to be the first Nokia Corporations handset without having the Nokia brand name on it.

Talking about the Nokia Lumia 2020, it is going to set a new name for the 8 inch tablets available in the market. This tablet of Nokia Corporation would be having 800 snap dragons processor in it and would also be having 1080 resolution display. The Nokia Lumia 2020 would be faster as compared to the Lumia 2520. It will have higher PPI display and will be available with stylus support.

The arrival of the Nokia Lumia 1080 p is also expected from the company in the near future. Moreover, Nokia Corporation has launched their first tablet known as Lumia 2520.

Talking about the trading sessions of Nokia Corporation, the estimations made available by Market Watch, the stock of shares of Nokia Corporation has an average price target of $7.47 with a consensus holding of hold.”

Source: http://wallstreetpr.com/nokia-corporation-adr-nysenok-is-going-to-launch-new-handsets-in-2014-12453

BlackBerry at $6.72

At the start of trading BBRY is hovering at $6.72. The stock is trading where it was one year ago. The lack of marketing, strategic reviews, C level missteps and miscommunications have added to the decline, along with negative analyst reports. The new direction must be steady, determined, well planned and communicated with a new resolve to aggressively market and place BlackBerry products in customer hands.

It is important to see action on the product placement front. Thorsten Heins brought OS 10 products to fruition, but failed to assess or create demand. He will be rewarded for this in spades. Sr. Mgmnt could not market or deliver a message of interest to consumers. That has to change. For that to happen a clear understanding of what BlackBerrry stands for,
past, present and future is needed by Mgmnt in moving forward with OS 10, BES10, BBM and M2M with QNX and embedded systems. This message must be consistent and evangelized!

BlackBerry: Looking For a Mutually Beneficial Partnership

by Darryl McKinnon and Fernando Commodari

Recently we’ve posted about why BlackBerry should remain publicly traded & in Canada:

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

https://pfcsystems.wordpress.com/2013/10/27/blackberry-an-alternative-reality-an-alternative-future/

It’s not clear what the next few days will bring, but there are several options:

http://crackberry.com/here-s-what-happens-blackberry-november-4th

FAIRFAX

Looking at the Fairfax deal we can try to understand the synergies to it.  We can try to figure out why it may or may not make sense. With the facts being that if the BlackBerry management team, and the army of employees under them, were not able to complete the transition to date, why would Fairfax be able to do so? What mobile technology background does Prem Watsa have that BlackBerry currently doesn’t? There is none!  What social media/network experience with on site ads for BBM Channels does this deal bring to BlackBerry?  Again, none!

The Fairfax deal makes no sense except for Fairfax to get their original investment back out of BlackBerry. Firstly, the Board (with Prem Watsa, as a member) put the incentive in place for Thorsten Heins to sell BlackBerry and receive a massive payday by doing so. Then, in return, the BlackBerry CEO agrees to an ultra low sales price, a day after the stock price was trading higher.  Within the agreement to sell BlackBerry to Fairfax is a financial clause that if BlackBerry was to take another offer for the company, Fairfax is to receive $150 million. We’ve seen deals where if the buyer backs out there is a financial penalty to be paid to the company that was to be bought.  We’ve never seen a deal where if the seller finds a better offer they have to pay the original buyer! This clause is simply ridiculous! It’s set to ensure Fairfax gets paid handsomely for their efforts. Yet there’s no benefit for your average shareholder that has been vested in BlackBerry during the difficult times and still truly believes in the company and their technology!

http://empowerednews.net/nasdaqbbry-investor-alert-investigation-of-potential-takeover-of-blackberry-at-9/1845143/

Understanding the above, one asks the question, “Why would Fairfax set up a deal that begs for a superior offer?”- Fairfax has no interest in BlackBerry. They are a financial insurance company. They want their money back; and they’ll get it. It helps greatly if you’re at the table on both sides of the deal.

So what’s the end game then? Is it a sale of BlackBerry by any means possible? The assets are clear, the value is obvious, to those select companies that make it their business to know, BlackBerry’s current competition: Google, Apple, Microsoft, Facebook, Lenovo among others. All these companies have been or are currently rumored to be looking at BlackBerry to buy the company for its assets that the Fairfax deal has priced at half of book value. A steal by any assessment!

Knowing we are fast approaching November 4^th, barring direct government support:

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

there is more than one form of support that could work.

This support could come from one of the aforementioned prospective BlackBerry suitors. One can make a clear business case for anyone of these potential suitors to take a substantial stake in BlackBerry, instead of buying the company. Supporting the company with an infusion of cash and the perceived stability created from the newly formed partnership, would substantially lead to gains for both partners in the resurgence of BlackBerry.  A partnership has to be a match or fit that works for the two parties, and allows beneficial gains for each, from the union. With “partnership” being the key word, let’s, for the sake of a number, select a 49% stake from all of the current potential bidders and look at what the mutual benefits might be.

Facebook

The synergies between BlackBerry & Facebook make sense, so let’s start there as many of the benefits can be repeated with some of the other prospective partners.

“A strong partner like FB would ensure the cash they need to complete transition while maintaining R&D, it would bring a fresh new appeal to the BBRY brand and surely increase device sales. It would bring Instagram, followed by other top apps and stop the BBRY’s dead news but hopefully it will force a radical change of management. I think the German guy failed and he was still too close to Mike Lazaridis. BBRY needs new and outsider blood in the management team and surely a brand new marketing team made of under 35’s super talented people.”

http://crackberry.com/node/182125

[We take issue with the under 35 part of the quote—LOL!]

Let’s say Facebook bought a 49% stake in BlackBerry and that the two companies started to work together. Facebook doesn’t make hardware. It’s not in their DNA. The deal instantly gives FB a huge stake in a massive hardware market with fantastic potential. Let’s admit it, hard work has been done with BB10. The foundation has been laid. The future is bright, yet again what BlackBerry needs is a bit more time and more intelligent and sustained marketing across the globe.

“They’ve [FaceBook} been pushing for their own platform for a while, and are obviously not thrilled with how Google is dealing with them. They pushed an update that allowed Facebook to bypass the Play Store as far as updates are concerned, and Google changed the terms of service on them, forcing apps to go through the Play Store for updates. Seems like they’re trying to get away from Android, they just don’t have any other option. Not sure BlackBerry would be a good fit, but maybe they just want to keep their options open?”

http://crackberry.com/node/182125

Time and marketing are what Facebook can provide for BlackBerry. By doing so they can drive the value of the deal and return huge value in their new hardware alliance/division. Facebook speaks to over 850 million users. They are in a premium position to get the much needed word out about BB10, with direct marketing and ads on their pages.

Facebook could also bring the mobile advertising expertise to assist the emerging BlackBerry Social Network, BlackBerry Channels. Facebook could even have its own exclusive channel!

Apple

Let’s say Apple takes a 49% stake in BlackBerry. Even though Apple is ultra popular, the fact remains that they are losing the battle to Google and Android (think Samsung!). By supporting BlackBerry, Apple could again provide the time and money needed to complete the transition, that BlackBerry needs. Apple, by doing so, acquires a second front to battle Android. BlackBerry and Apple could work together improving Apple’s security. As BlackBerry grows, Apple retains the 49% of revenues.  This would be similar to the rescue that Microsoft and Bill Gates offered Apple, years ago.

Google

Let’s say Google buys a 49% stake in BlackBerry. This, as with the other prospective partnerships, would provide the time and funding for BlackBerry to market its new OS. Google could retain extra revenue, and share patents (so could any other partner!).  Google could advertise on BlackBerry Channels exclusively, using it’s expertise in on-line ad placements.  Additionally, Google is still first and foremost a service provider. They could develop their apps for BlackBerry and Google could be rewarded (like any other partner) with BlackBerry’s security/BES10 & enterprise offerings. If Google were to do this, it would lessen the view they might be approaching monopoly status with Android.  This is similar to the incentive Microsoft had with Apple back in the late 1980s.

Microsoft

Let’s say Microsoft invests in a 49% stake in the company.  A non-compete agreement and cross IP sharing deal could be made, as with Google and Apple, or even Lenovo. This would give MS a serious new suite of security and MDM offerings to give it an edge over its competitors, Apple’s, iOS and Google’s, Android. Microsoft could seed BlackBerry OS10, diluting Android’s and iOs’ reach. Honestly, though, with its own strategy of seeding Windows 8, cross platform, we don’t see Microsoft buying a stake in BlackBerry for anything but the patents and BES10/NOC.

Samsung

It is not clear that Samsung would want to partner with BlackBerry, as it has no more to gain than say Microsoft, Apple or Google.  Samsung is developing its own OS and already has its own version of Android that is very successful. It is neck and neck in the running with Apple for shear volume of hardware out in the global market.

Sony

This company is like Lenovo, but with a bigger hardware presence outside its own borders. Sony could benefit from the new BlackBerry 10 OS on its handsets, helping to differentiate it from Android and iOS or even Windows 8. Also, Sony, like Lenovo, would have security advantages using the BlackBerry OS10 on cell phones, which might lead to easier access to the BlackBerry NOC/BES10 than for even Lenovo. Sony had a partnership with Ericsson which never amounted to larger market shares.  It might be willing to take a chance with a new BlackBerry partnership.  We note that BlackBerry OS 10 phones were left out of the Japanese market by BBRY.  Could this be a way to entice Sony with exclusivity in Japan, in exchange for its financial backing?

Lenovo

Let’s say Lenovo took a 49% or less  stake in the company. Currently Lenovo has no mobile OS to call its own. Gaining a toe hold into BB10 may actually benefit them the most. By only having a 49% or less holding in BlackBerry,  the security regulators would be hard pressed to frown upon the deal, if BlackBerry retains confidential the NOC and security side of the business.  Together, BlackBerry and Lenovo, could  dominate the Asian markets. Lenovo (like Facebook) would benefit in new ways that all the others wouldn’t, via the much needed mobile hardware/software and services expertise that BlackBerry would bring.  BlackBerry would gain the financial backing it needs to finish its transition to BlackBerry 10 and machine to machine ventures with the new BBM, NOC/BES10 services. This partnership offers both sides benefits, as in the case with Facebook, whereas any prospective Microsoft, Google, Apple partnership, would most benefit BlackBerry. Any control of BlackBerry by the latter three companies or even Samsung, would most likely lead to a sell off and break up of BlackBerry.

Maybe, in the end, the biggest motivator that each one of these prospective partners has to enter into a new partnership with BlackBerry is to simply stop one of the others from accomplishing it first. Also, any prospective partner could get an advantage, in addition to the patents, and NOC/BES10, in the new machine to machine world via BlackBerry’s QNX:

https://pfcsystems.wordpress.com/2013/10/27/blackberry-an-alternative-reality-an-alternative-future/

News is breaking everyday that supports BlackBerry’s market offerings of Security first, with its unique MDM able to control not only Blackberry devices, but also iOS and Android devices. A cloud capability is also coming soon. Security is a marketable feature and BlackBerry needs to do a better job of advertising it, not only to enterprise grade customers but also to their everyday consumers who would be leery to learn about the databases of SMS and e-mail messages Google collects.

In summary, BlackBerry needs capital to market its new BlackBerry 10 portfolio and to buy it time to do so while completing its transition to the new platform while bringing new NOC services to the public/enterprise, BES10, BBM and BBM Channels.  The two most obvious/often recognized suitors that would also gain most from a partnership with BlackBerry, are Lenovo and Facebook.  Sony would also gain as much, if not as prominent a suitor. It’s not likely that Facebook has the assets on hand to flat out buy BlackBerry.  Even if Lenovo could do so, it would face regulatory issues in Canada and the USA, leaving a partnership option the only path to move forward.  Apple, Microsoft and Google, would have less to gain from a partnership with BlackBerry, having their own hardware/software vertically integrated, already.  These three companies, as well as Samsung, would most likely use the patent portfolio and the NOC/BES10 secure servers/software to their advantages in gaining access to enterprise clients.

Stay tuned, as the cat will be let out of the bag, on or before November 4, 2013!  Ofcourse, BlackBerry may decide to stay the course, on its own, public and Canadian, having acquired a second wind.  Or, perhaps Mike Lazaridis might come into the picture, as part of the Fairfax deal or with other partners. What does your crystal ball say will happen?  Tell us below in the comments!

UPDATE November 1, 2013 11:00 am:

The lines are drawn and the sides for battle have been determined!  The Rockstar consortium including the partners, Apple, BlackBerry,Microsoft, SONY and Ericsson, are engaged in a lawsuit against Google and everything Android (Samsung, HTC, Huawei);

BlackBerry has new BFFs in its consortium partners, and one of these companies, or Lenovo, or Facebook, is on the right side to help BlackBerry as discussed above!  Check this out:

Google, Samsung Sued by “Rockstar” Consortium

https://pfcsystems.wordpress.com/2013/11/01/google-samsung-sued-by-consortium-owned-by-apple-microsoft-blackberry-sony/

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The golden parachute that Mr. Heins will receive if there is a change of control at BlackBerry

There was little incentive for the executives at BlacKberry to have allowed OS 10 to succeed, I predicted this on this Blog in another post.  Just like Leo Apotheker, who destroyed the WebOS launch for HP, Heins has had little incentive to watch OS 10 succeed.  I am sure he has tried, but in the face of the steep challenges, is he/has he loosing/lost his resolve? Let’s look at a previous** analysis:

With RIM/Blackberry certainly taking on the appearance of a company painfully circling the white porcelain bowl, I thought that the time was right to take a look at how the company’s CEO, Thorsten Heins was compensated in 2013 and how he will benefit from a change in ownership, a scenario that is extremely likely with the announcement of the signing of a letter of intent with Prem Watsa’s Fairfax Financial Holdings.

Mr. Heins took over as President and CEO in January 2012 after serving as Chief Operating Officer of Product Engineering.  Interestingly, according to the 2013 Proxy Statement, Mr. Heins received 85.15 percent approval of the company’s shareholders with a significant 14.85 percent of shareholders withholding their votes, the only way that shareholders of Canadian companies can express dissatisfaction with a Board Member.

Let’s start by looking at Mr. Heins’ compensation (and that of the other Named Executive Officers or NEOs) for 2013 and the previous two years to put things into perspective:

 

Mr. Heins’ base salary was $1,000,974 and he also received long-term incentive awards (LTIP) totalling $6,190,833 in “recognition of his outstanding performance in Fiscal 2013.”. His LTIP consists of 381,679 shares at a grant price of $7.86 (restricted stock units) and 763,358 shares at a grant price of $7.86 (stock options) as shown on this chart:

Including Mr. Heins’ non-equity annual incentive payment (AIP) of $1,717,295 (172 percent of his annual base salary), granted because he exceeded targets set by the Board , his total compensation package for fiscal 2013 was $9,065,077, down from $10,274,324 in fiscal 2012. Poor fellow indeed.  I do find all of this compensation information fascinating given that this is what happened to both net income and the value of the company’s handset sales over the past three years:

Now, let’s get to the meat of the matter, the golden parachute that Mr. Heins will receive if there is a change of control of the company.  If Mr. Heins is terminated before or within 24 months following a change of control, he will receive:

1.) A lump sum equal to twice his annual base salary (currently $1,000,974).

2.) Contributions to continue all non-equity benefits including extended health and dental coverage for 24 months.

3.) An annual incentive amount equal to two times base salary multiplied by the current AIP target percentage.  Based on the current base salary AIP target of 1.5, the payment would be $4.5 million.

4.) All stock options and RSUs are immediately vested and can be exercised over the next year or the applicable time remaining on the grant agreement, whichever is shorter.

5.) If the termination date occurs before the Grant Date, the company will pay Mr. Heins $33.75 million.

Apparently, there are very strong personal reasons why the current executive team would be looking for a change in control since all of the NEOs have similar agreements.

Now, for comparison’s sake, let’s see how the company compensated the “sweaty masses” that were turfed in 2012.  The company’s “2012 Cost Optimization Program” that saw the layoffs of approximately 2000 employees or 10 percent of the total workforce cost the company $125 million on a pre-tax basis in fiscal 2012.  During 2013, the company made cash payments of $10 million to terminated employees and paid an additional $24 million toward facilities costs.

I realize that this isn’t directly related to the subject of this posting but, as a Blackberry owner that had my first phone crash within the first week that I owned it, I found this information interesting noting that the numbers are in millions of dollars:

 

Basically, since fiscal 2011, Blackberry has spent $1.816 billion settling warranty issues on their products.  While I don’t have comparable data from other smartphone manufacturers, that may explain some of the issues facing the company.

Lastly, if you want to see who got screwed in this whole debacle, this graph explains it all in a nutshell:

 

Shareholders saw an investment of $100 in March 2008 plummet to a value of $12.77 in March 2013 at the same time as total Named Executive Officer compensation rose from $15,544,628 to $25,044,614. Granted, from 2012 to 2013, NEO compensation dropped from just under $31.7 million to its current level, but that’s small compensation for the company’s much beleaguered shareholders.

Once the market sees a company as weak and vulnerable, perception becomes reality and there is very little chance of recovery.  Such is the case for RIM/Blackberry and this year’s rebranding did nothing to change the company’s plunging fortunes. Fortunately, for the company’s NEOs, they get paid handsomely either way.  Unfortunately, long-term shareholders do not.

** source:http://viableopposition.blogspot.ca/2013/09/blackberry-who-benefits-from-control.html

BlackBerry Stock up 3.64%

Today, the new Network Aljazeera America discussed how BlackBerry lost its way, and might yet see a turn around.

Nadia Damouni, the corporate board correspondent was on with Tony Harris.

She indicated how she has two BlackBerry devices and loves her new Z10. Tony did not realize that BlackBerry has new OS 10 devices, but loves his OS 7 device. Ms. Damouni stated that BlackBerry is a jewel of Canadian high tech companies, not withstanding its recent fall in the USA, and that the Canadian government is watching closely on the prospective buyers / partners for BlackBerry.

The stock was up 3.64% on NASDAQ.

It closed at $7.97.

Not a Good Friday Afternoon For BlackBerry

By the end of the day the stock tanks to $8.75 from near $10.75, after announcing around 4000 job cuts and preliminary Q2 results showing near $1 billion in write-offs due to poor Z10 sales.

BlackBerry Stock is Rising

BlackBerry Stock is up near $2.00 since yesterday’s announcement that there is a steering committee looking into strategic alliance options. We expect to see a partnership of some kind with the likes of SONY.

I Am Unique, I Follow The Road Less Traveled

One thing about having a new BlackBerry Z10, is that it suits my personality as a unique person. Yesterday, on the Metro North train into NYC, amidst the iPhones and Galaxy S4s, I was the only one with a new BlackBerry. Some of the stares seemed envious. Others had not seen the new Z10 or Q10 nor were they informed about “Balance” or the new OS. I gladly answered questions and demonstrated the unique OS. Pictured here are Alejandro and his son Juan Carlos, originally from Ecuador. Alejandro had his torch, so I added him to BBM. His son is happy with his IPhone, but is waiting to check out the A10. Alejandro will see if he can upgrade to a new BlackBerry. I told him to go to Best Buy to do an upgrade with his provider AT&T. Not shown are a New Zealander who will also look into upgrading now that he knows that BES 10 is not a requirement.

Investing Requires Risk

I am long on BlackBerry.  With the stock losing near 30% on Friday, June 28, 2013, closing at $10.46 on NASDAQ,  because of many reasons that were listed in the links below,  I lost whatever gains I had made.  Since I bought a good bulk of my shares in September of 2012, when BBRY was near $6, and overall my stock purchases were with a weighted average of about $10.4, I am not really losing money.  Yet, it hurts to give up the thousands of dollars gained.  Some would say, I should have sold it before the Friday Q1-2014 earnings report. Betting on the stock market is like gambling, you have to be willing to set aside a given dollar amount that you can risk losing intelligently.  I have faith that the bad days for BBRY are behind them, and I am optimistic that in the long term I can make money.  Now is a good time to get more stock! Sure, I am not happy with the decision, at this time, that the PlayBook is now not getting BB10, but I think that the CEO, Thorsten Heins,  is sure and steady and has conviction to take the company to profitability with good earnings for the share holders.

Now might be a good time to take a risk on BBRY since the Q10 is now in late June in the market in the USA where the Z10 has set the standard for a new mobile OS, the Q5 is about to be launched world-wide, a lower priced OS10 model, the A10 phablet is rumored to be launching this Fall, a new OS 7.2 phone leveraging BBM with BIS in developing and other markets will add to revenue while OS 10 marketing and placement in developed markets is ramped up.  Let’s not forget that the QNX based BB10 OS is a unique platform for machine to machine telematics.

I still hope that eventually the PlayBook will get a version of OS10. Come on Thor, 10.0.10.648 on the PlayBook, that would be a way better experience than the current QNX OS 2.x on the PlayBook.  You can do it!  Nothing in life is perfect.

Links reviewing the June 28, 2013 earning call:

Marketing Needs to Be Holistic

https://pfcsystems.wordpress.com/2013/06/28/marketing-needs-to-be-holistic/

BlackBerry Stock Down 30%

https://pfcsystems.wordpress.com/2013/06/28/blackberry-stock-down-30/

No article or post on this site should be viewed as recommendation for a particular stock purchase.  Betting on the stock market comes with a risk of losing money!

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Marketing Needs to Be Holistic

ho·lis·tic

/hōˈlistik/

Adjective Characterized by comprehension of the parts of something as intimately interconnected and explicable only by reference to the whole.

After today’s earning report debacle, I am left asking what role BlacKBerry marketing plays in the messaging component of an earnings call?  Are they there to make sure that what the CEO says won’t compromise the marketing effort? Is the messaging measured and adjusted against the global goals to grow the product offering?  Is the branding image considered, is the value on OS 10 considered? Is scripting provided/suggested to stay on point in a way that the message does not negatively impact the stock value? I alluded to much of this in my other post today:

BlackBerry Stock Down 30%

https://pfcsystems.wordpress.com/2013/06/28/blackberry-stock-down-30/

Being on point at an earnings call and in line with marketing is critical to minimize negative impact on a stock.  The messaging today should have been:

The premium OS is OS 10, but we need to put out OS7 devices for emerging markets to help with our global sales numbers around the world, as we ramp up our efforts in the USA.  

Instead, the PlayBook has become an issue and surrounding this the value that the executives are placing on OS10.  There are enough PlayBooks out there to use in a marketing effort by updating to OS10–some version of it.  I want to know what is really going on here?

My take:

As for the PlayBook either don’t mention it or leave developing the OS further/porting BB10 to it an option or explain why it is not an option, at this point.  Personally, I don’t buy into not having enough RAM for BB10, as I run OS10.0.10.648 full on on my Dev Alpha A with 1GB of RAM and similar specs to the legacy PlayBook.  It is, even if limited as some claim in a very subjective way, a better experience for me than the PlayBook OS 2.x.]

I paid $399 for the 32GB back in the day when no one in the USA had a clue, believing/evangelizing on the OS 10 to come. Do they,BBRY, have a deal with SONY or the like to stay out of the tablet space for licensing the OS10? What is really going on? I believe that HP got in trouble with Microsoft when their tablet debacle occurred. It is time for transparency and to hold the BlackBerry executives accountable for the blood letting of the stock today! I lost $3-4 per share today–awful! Thousands of dollars,but I am long on BBRY and the stock market is a gamble where you have to be ready to lose it all! I hope this won’t happen and that the BlackBerry/RIM board has a good chat with Thor and the others on what they say in public and the ramifications. I am not impressed on the execution of many of the marketing aspects of a product/image/brand–the approach has to be holistic!  One only need look at what happened to HP while under Leo Apotheker and what appeared to be mixed messaging.  BlackBerry is not HP, and cannot survive such errors in messaging. Marketing is about perception and creating a reality. After this call things don’t look good. Are the executives looking to sell the company and exit with golden parachutes on the backs of the stock holders?  Come on guys, you can move BlackBerry forward and do better!

Posted via CB10

BlackBerry Stock Down 30%

I wonder how much of today’s stock plunge was due to mis- handling, mis -wording, mis- marketing, mis-spinning of the Q1 earnings report.  Are these reports rehearsed at all with the marketing people?  I am there with everyone that bad numbers lead to a plunge, but can what the CEO of a company says exasperate this by the spin the press/media makes of what is said?  The old adage holds true that if you have nothing good to say, it is better not to say anything at all, or limit what you say, within the confines of what is required.  A statement that BlackBerry 10 is not coming to PlayBook while stating that a new BB OS 7 phone is coming seems odd.  It says better to have resources in an old platform than in a new one that loyal people bought into at a premium.  Even if this is a thought–no need to say so, if there is no obvious rationale for such a statement, or if it is not relevant with so few PlayBook users. I understand the math/rationale, that there are tens of millions of BB OS 7 users, and only tens of thousands of PlayBook users; more low end BBOS7 market users than high end BB10 market share, and the rate of increase in BB10 market share is not enough to offset the declining BBOS 7 sales due to a shift in “NEW” devices.  Yes, we need another BBOS7 device to help us with our sales numbers in developing markets. Maybe the CEO knows something else we don’t.  Transparency is key or don’t open a can of worms that starts a downward marketing spiral and adds to the stock decline of near 30% today.  Here is some of the back and forth on today’s noon CBS 2 NYC newscast, originated by Mary Cristoforis’ Business Report which included the fact that BBRY is down near 30% by noon EST:

“I miss my old BlackBerry, but … BlackBerry… who has a BlackBerry anymore–everyone has IPhones”, Alice Gainer.  “I wouldn’t say that, many people still have BlackBerry phones”, Chris Wragge. “Yes, they are an IPhone competitor”, Maria Cristoferis”!

That there was no mention of the Z10/Q10/Q5 speaks volumes to the marketing work ahead for BBRY, especially in the USA market. (BlackBerry, this is your cue to send Chris Wragge, and the CBS 2 crew a mix of Z10 and Q10 devices!) I was watching the mid-day CBS 2 News in NYC while reading the posts on CrackBerry, specifically the one with all the irate PlayBook owners which did not need to happen or be the media focus on CrackBerry due to the statements made at the earnings report:

BlackBerry announces BB10 is not coming to PlayBook

http://crackberry.com/blackberry-announces-bb10-not-coming-playbook

As a stock owner, I am not pleased, with today’s downward spiral, and with the way the call went with what was said that was not of major relevance to the numbers at hand.  Sticking to a script might be the way to go in the future!  It is enough of an uphill battle to gain market share in the USA and around the world with marketing campaigns, this sort of unfocused reporting leads to a demise of any gains, and provides fodder to the nay sayers! I like Thorsten Heins, and I believe he is doing a lot of good, but he needs to watch what he says, as it carries serious repercussions with the stock.  One only need look at what happened to HP while under Leo Apotheker and what appeared to be mixed messaging. Being on point at an earnings call and in line with marketing is critical to minimize negative impact on a stock.  The messaging:

The premium OS is OS 10, but we need to put out OS7 devices for emerging markets to help with our global sales numbers around the world, as we ramp up our efforts in the USA.  

[Off message and therefore an earnings call is not the place for thoughts on the PlayBook, but since it was brought up my take follows:

As for the PlayBook either don’t mention it or leave developing the OS further/porting BB10 to it an option or explain why it is not an option, at this point.  Personally, I don’t buy into not having enough RAM for BB10, as I run OS10.0.10.648 full on on my Dev Alpha A with 1GB of RAM and similar specs to the legacy PlayBook.  It is, even if limited as some claim in a very subjective way, a better experience for me than the PlayBook OS 2.x.]

How is BBRY Stock Fairing Before The Upcoming Earnings Call?

by Fernando Commodari, Ph.D.

Two days ago when the markets were down (NASDAQ), BBRY was bucking the trend and was up.  Today it is closing on NASDAQ up at $14.91 and on the TSE up at $15.63.  I believe that the next earnings report will be a pivotal turn-around moment for the stock and the shorts will begin to get squeezed. Today  Zacks Equity Research reports that BBRY is likely to top its earnings when it reports first-quarter fiscal 2014 results before the opening bell on Jun 28, 2013. They state:”The combination of BBRY’s Zacks Rank #3 (Hold) and +100.00% ESP makes us confident of a positive earnings beat on Jun 28, 2013.”

The report can be found here:

BlackBerry Likely to Top Earnings

On Seeking Alpha, Steve “Ziffster” discusses:  “The Longs & Shorts On BlackBerry”.  In an attempt to be analytical about trying to predict a turn around for BBRY he discusses key factors for a  BBRY turn around:

“Turnarounds are a slow processes and success is difficult to predict. However, below are the indicators worth watching and how BlackBerry currently fairs.

• Profitability – Although one quarter is not enough to establish a trend, another positive quarter should demonstrate BlackBerry’s ability to earn a profit.
• Cash Flow and Reserves – This was never an issue for BlackBerry.
• Gross Sales – Unfortunately for BlackBerry, sales as currently reported are still declining quarter over quarter and this will continue if BB7 sales decrease faster than BB10 sales increase.
• Turnover – Financial statements have never shown problems with accounts payable or receivable turnover. Inventory turnover (once channel stuffing is calculated in), which was a problem, improved as of the last quarterly.
• Market Share – Hard numbers provided in previous financial statements confirmed that market share was still dropping and information reported since then has been mixed.
• Resource Optimization / Overhead – BlackBerry has taken significant steps to optimize efficiency. The last quarterly report suggested margins were now among the highest in the industry. Some analysts have questioned if these gains were real or if they were artificial due to one-time adjustments so this point is worth watching.
• Research & Development – BlackBerry is in the midst of its largest roll-out ever including transitioning to an entirely new platform (BB7 to BB10), multiple new devices, transitioning its services platform to multivendor and expanding QNX functionality to include paid services. So far all of these initiatives seem to be proceeding smoothly.
• Financial Stability – BlackBerry has never had problems repaying debt, paying employee benefits, performing plant maintenance, or replacing manufacturing machinery in a timely fashion.
• Corporate Moral – Staff is much more upbeat lately. Employees of all levels are encouraged to voice their ideas openly and a slew of new social activities are being offered to employees by the company. This time last year staff was depressed about the future of the company and felt left out.
• Clear Vision – Thorsten Heins has clearly articulated where he sees the company headed, and has done a good job selling his vision. However, what’s missing are the details of how the changes will contribute to the bottom line.”

and surmises:

“Overall signs are positive, but there are enough concerns to warrant caution until more information is available. Things to watch for in the June 28, quarterly report are:

• Has the decline in gross revenue stopped?
• Has the decline in market share stopped?
• Has cash flow remained positive?
• Have cash reserves been preserved?
• Have gross margins been maintained?
• Have clues been provided regarding how BlackBerry intends to monetize ‘Free’ multi-platform BBM?

Earnings per Share (EPS) is of course important, and may have a significant impact on the market short term, but from a long-term perspective the above points will provide better insight into the status of the turnaround.

Subscriber base has long been suggested as a good indicator of BlackBerry’s health. However, due to changes in BlackBerry’s service model, this is no longer the case. Value will be limited to primarily just indicating the number of subscribers still with BB7 devices.”

He then states:

“In a bid to resolve this conundrum, NYU Professor Edward Altman introduced the Z-score formula in the late 1960s. Rather than search for a single best ratio, Altman built a model that distills five key performance ratios into a single score. As it turns out, the Z-score gives investors a pretty good snapshot of corporate financial health. Here we look at how to calculate the Z-score and how investors can use it to help make buy and sell decisions.

Here is the formula (for manufacturing firms), which is built out of the five weighted financial ratios:

Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Where:

A = Working Capital / Total Assets
B = Retained Earnings / Total Assets
C = Earnings Before Interest & Tax / Total Assets
D = Market Value of Equity / Total Liabilities
E = Sales / Total Assets”

BlackBerry’s current Z Score works out to around 2.5, which indicates a company could go either way.  He concludes:

“Although midterm prospects are definitely looking up for BlackBerry, it is too early to call what will happen longer term as signs are mixed. If the next few quarters are positive, most of the naysayer’s should stop questioning if the turnaround can be sustained and share price should stabilize.

The gamble every investor makes standing on the sidelines until the future is known is that they miss out on the substantial gains possible with speculative stock. BlackBerry could end up being the most undervalued stock of the year… or then again might not.

Although I remain long, I appreciate why BlackBerry is so highly shorted.”

The Ziffster story is here:

BlackBerry Longs Versus Shorts 

Kofi Bofha, this morning presented a good case for not shorting BBRY, in reviewing where the stock has gone since its low of $6.22 on September 24, 2012.

The Boha article is here:

BlackBerry: Prepare For A Short Squeeze 

In another post, on June 23, 2013:

Channel Checks for Research In Motion Ltd (BBRY) Look Very Good Pre-Earnings: Misek

“Peter Misek, CFA, CPA at Jefferies thinks that in the near term, Research In Motion Ltd (BBRY) may deliver a surprise. Results from suppliers Jabil/Wistron and another round of UK store checks lend continued confidence in their far above Street estimates. Misek expects limited Aug Q guidance details but thinks sell-through will ultimately prove that BB10 is not just a one quarter channel fill phenomenon”

Todd McDonald, also weighed in this morning with his valuation and concluding analysis:

“Technical Review

BlackBerry shares have formed a symmetrical triangle, trading around the 50-day SMA throughout the year. The consolidation pattern indicates that a breakout could happen either way, making the upcoming report crucial if it breaks. Should earnings surprise to the upside, look for initial resistance at the $15-level, followed by the descending trend line near $15.50. If earnings disappoint, potential support is near $13.50, followed by the 200-day SMA near $12.50.”

The McDonald article is here:

BlackBerry Earnings Preview: Q1 2014

As mentioned above, I believe that the next earnings report will be a pivotal turn-around moment for the stock and the shorts will begin to get squeezed, based on an objective review of the available data. This will be especially the case if BBRY meets or exceeds anticipated earnings. The comments in the above referenced articles/posts, are also worth reviewing.  Based on a review of the trends over the last year and the momentum going forward, I expect the stock to begin to move away, in an upward direction, from the $13-$14 mark it has been hovering at during this period of adjustment with the the Z10 and Q10 launch and re-invention.  I expect, with a positive earnings call, that the stock will approach the $20 mark by the Fall, with the launch of multiple new OS 10 devices, including the A10 and Q5.  This is what I see in MY crystal ball, but if the numbers aren’t there, things can move in the opposite direction, in the short term.

I am long on BBRY.  Nothing written on this site should be viewed as an endorsement of any stock or any stock over another; we cannot predict the market!

CNBC Interview With BlackBerry CEO Thorsten Heins on Earnings Beat

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:

 

 

BlackBerry Reports Year-End Fiscal 2013 & Q4 Results

BlackBerry reports earnings:

WATERLOO, ONTARIO–(Marketwire – March 28, 2013) – Research In Motion Limited (doingbusiness as BlackBerry) (NASDAQ: BBRY)(TSX: BB), a world leader in the mobile communications market, today reportedfinancial results for the three months and fiscal year ended March 2, 2013 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Q4 Highlights:

– Revenue of $2.7 billion
– GAAP income from continuing operations of $94 million, or $0.18 per
share diluted
– Adjusted income from continuing operations of $114 million, or $0.22 per
share diluted
– Gross margin of 40% driven by higher average selling prices and hardware
margins
– Shipments of 6 million smartphones, including approximately 1 million
BlackBerry 10 units
– Subscriber base of approximately 76 million
– Cash flow from operations of $219 million, cash and investments balance
of $2.9 billion

Q4 Results
Revenue for the fourth quarter of fiscal 2013 was approximately $2.7 billion, down $49 million or 2% from approximately $2.7 billion in the previous quarter and down 36% from $4.2 billion in the same quarter of fiscal 2012. The revenue breakdown for the quarter was approximately 61% for hardware, 36% for service and 3% for software and other revenue. During the quarter, BlackBerry shipped approximately 6 million BlackBerry smartphones and approximately 370,000 BlackBerry PlayBook tablets.

GAAP income for the quarter from continuing operations was $94 million, or $0.18 per share diluted, compared with the GAAP income from continuing operations of $14 million, or $0.03 per share diluted, in the prior quarter and a GAAP loss from continuing operations of $118 million, or $0.23 per share diluted, in the same quarter of fiscal 2012. GAAP income for the quarter, including income from discontinued operations, was $98 million, or $0.19 per share diluted, compared with the GAAP income including loss from discontinued operations of $9 million, or $0.02 per share diluted, in the prior quarter and a GAAP loss, including loss from discontinued operations of $125 million, or $0.24 per share diluted, in the same quarter of fiscal 2012.

Adjusted income from continuing operations for the fourth quarter was $114 million, or $0.22 per share diluted. Adjusted income and adjusted diluted earnings per share (“EPS”) exclude the impact of pre-tax charges of $29 million ($20 million on an after-tax basis) related to the Cost Optimization and Resource Efficiency (“CORE”) program. This impact on GAAP incomefrom continuing operations and diluted EPS are summarized in the table below.

The total of cash, cash equivalents, short-term and long-term investments was approximately $2.9 billion as of March 2, 2013 and at the end of the previous quarter. Cash flow from operations in the fourth quarter was approximately $219 million. Uses of cash included intangible asset additions of approximately $235 million and capital expenditures of approximately $88 million.

“We have implemented numerous changes at BlackBerry over the past year and those changes have resulted in the Company returning to profitability in the fourth quarter,” said Thorsten Heins, President and CEO. “With the launch of BlackBerry 10, we have introduced the newest and what we believe to be the most innovative mobile computing platform in the market today. Customers love the device and the user experience, and our teams and partners are now focused on getting those devices into the hands of BlackBerry consumer and enterprise customers.”

Heins added, “As we go into our new fiscal year, we are excited with the opportunities for the BlackBerry 10 platform, and the commitments we are seeing from our global developers and partners. We are also excited about the new, dynamic culture at BlackBerry, where we are laser-focused on continuing to drive efficiency and improve the Company’s profitability while driving innovation. We have built an engine that is able to drive improved financialperformance at lower volumes, which should allow us to generate additional benefits from higher volumes in the future.”

Outlook

The Company will be increasing its marketing investment in the first quarter of fiscal 2014 in support of the global launch of BlackBerry 10. Including the anticipated 50% sequential increase in marketing spending, the Company believes it will approach breakeven financialresults in the first quarter based on its lower cost base, more efficient supply chain, and improved hardware margins.

Board Update

The Company also announced that Mike Lazaridis, having fulfilled the commitment he made to the Board in January 2012, has decided to retire as Vice Chair and a Director of the Company. Lazaridis co-founded BlackBerry nearly 30 years ago and served as a co-CEO of the company until last year when he was elected Vice Chair of the Board. Lazaridis, who last week announced the launch of his new venture, Quantum Valley Investments, will step down from the BlackBerry Board effective May 1, 2013.

“We are grateful to Mike for his contributions to BlackBerry during the past three decades,” said Barbara Stymiest, Chairman of BlackBerry’s Board of Directors. “Mike invented the BlackBerry and is widely recognized as one of Canada’s greatest innovators. Mike played a pivotal role for the past 15 months in helping with the leadership transition and the successful launch of BlackBerry 10. We deeply respect and appreciate Mike’s desire to devote his full-time efforts to his exciting new venture, and we wish him all the best.”

“I admire Mike for his many achievements and for his vision in helping bring BlackBerry 10 to fruition,” said CEO Thorsten Heins. “On a personal level, I am grateful to Mike for his help, guidance and advice during my first 15 months as CEO of BlackBerry. I wish him all the best.”

“With the launch of BlackBerry 10, I believe I have fulfilled my commitment to the Board,” Lazaridis said. “Thorsten and his team did an excellent job in completing BlackBerry 10. We have a great deal of which to be proud. I believe I am leaving the company in good hands. I remain a huge fan of BlackBerry and, of course, wish the company and its people well.”

Reconciliation of GAAP loss from continuing operations before income taxes and diluted EPS from continuing operations to adjusted income from continuing operations before incometaxes and adjusted diluted EPS from continuing operations:

(United States dollars, in millions except per share data)

For the three months ended
March 2, 2013
—————————————-
CORE
GAAP Charges (1) Adjusted
—————————————-
As reported:

Income (loss) from continuing
operations before income taxes $ (18) $ 29 $ 11

Income from continuing operations 94 20 114
—————————————-

Diluted EPS from continuing
operations $ 0.18 $ 0.04 $ 0.22
—————————————-
—————————————-

Note: Adjusted income from continuing operations and adjusted diluted EPS from continuing operations do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted income from continuing operations and adjusted diluted EPS from continuing operations enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.

(1) As part of the Company’s ongoing effort to streamline its operations
and increase efficiency, the Company commenced the CORE program in
March 2012. During the fourth quarter of fiscal 2013, the Company
incurred approximately $29 million in total pre-tax charges related to
the CORE program. Substantially all of the pre-tax charges are related
to one-time employee termination benefits, facilities costs and
manufacturing network simplification costs. During the fourth quarter
of fiscal 2013, a pre-tax recovery of approximately $4 million was
included in cost of sales, charges of approximately $3 million were
included in research and development and charges of approximately $30
million were included in selling, marketing, and administration
expenses. The Company will continue to execute on the mandate of the
CORE program throughout fiscal 2014.

Fiscal 2013 Results
Revenue from continuing operations for the fiscal year ended March 2, 2013 was $11.1 billion, down 40% from $18.4 billion in fiscal 2012. The Company’s GAAP net loss from continuing operations for fiscal 2013 was $628 million, or $1.20 per share diluted, compared with GAAP net income from continuing operations of $1.2 billion, or $2.23 per share diluted in fiscal 2012. Adjusted net loss from continuing operations for fiscal 2013 was $317 million, or $0.60 per share diluted. Adjusted net loss from continuing operations and adjusted diluted loss per share for fiscal 2013 exclude the adjustments described above as well as the impact of a pre-tax goodwill impairment charge of $335 million ($326 million after tax), an income tax benefit of $166 million, and charges of $220 million ($151 million after tax) related to the Company’s CORE program that commenced in March 2012. These charges and their related impacts on GAAP net income and diluted earnings per share are summarized in th e tables below.

Reconciliation of GAAP net loss from continued operations and diluted loss per share from continuing operations to adjusted net loss from continued operations and diluted loss per share from continuing operations:

(United States dollars, in millions except per share data)

For the fiscal year ended
March 2, 2013
————————————
Diluted loss per
Net loss from share from
continuing continuing
operations (net operations (net
of income tax) of income tax)
————————————
As reported $ (628) $ (1.20)

Adjustment:
CORE Program (net of tax)(1) 151 0.30
Impairment of Goodwill (2) 326 0.62
Income Tax Benefit (3) (166) (0.32)
————————————
Adjusted $ (317) $ (0.60)
————————————
————————————

—————————————————————————-

Note: Adjusted net loss from continuing operations and adjusted diluted loss per share from continuing operations do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted net loss from continuing operations and adjusted diluted loss per share from continuing operations enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.

(1) As part of the Company’s ongoing effort to streamline its operations
and increase efficiency, the Company commenced the CORE program in
March 2012. During fiscal 2013, the Company incurred approximately
$220 million in total pre-tax charges related to the CORE program.
Substantially all of the pre-tax charges are related to one-time
employee termination benefits, facilities costs and manufacturing
network simplification costs. During fiscal 2013, pre-tax charges of
approximately $96 million were included in cost of sales, charges of
approximately $27 million were included in research and development
and charges of approximately $97 million were included in selling,
marketing, and administration expenses. The Company will continue to
execute on the mandate of the CORE program throughout fiscal 2014.
(2) During the first quarter of fiscal 2013, the Company performed a
goodwill impairment test and based on the results of that test, the
Company recorded a pre-tax, non-cash goodwill impairment charge of
approximately $335 million, or $326 million after tax.
(3) Reflects the favorable impact of the settlement of uncertain income
tax positions, including related interest and foreign exchange gains,
the Company recorded in the third quarter of fiscal 2013 that resulted
from the restructuring of the Company’s international operations.

Supplementary Geographic Revenue Breakdown

Research In Motion Limited (doing business as BlackBerry)
(United States dollars, in millions)
Revenue by Region

For the year
ended
—————–

March
2, 2013
—————–
North
America $ 2,896 26.2%
Europe,
Middle
East
and
Africa 4,502 40.7%
Latin
America 2,114 19.1%
Asia
Pacific 1,561 14.1%
—————–

Total $ 11,073 100.0%
—————–

For the quarter ended
——————————————————————-

March December September June
2, 2013 1, 2012 1, 2012 2, 2012
——————————————————————-
North
America $ 587 21.9% $ 647 23.7% $ 868 30.3% $ 794 28.3%
Europe,
Middle
East
and
Africa 1,227 45.8% 1,160 42.5% 1,087 38.0% 1,028 36.6%
Latin
America 479 17.9% 535 19.6% 520 18.2% 580 20.7%
Asia
Pacific 385 14.4% 385 14.1% 386 13.5% 405 14.4%
——————————————————————-

Total $ 2,678 100.0% $ 2,727 100.0% $ 2,861 100.0% $ 2,807 100.0%
——————————————————————-

Conference Call and Webcast
A conference call and live webcast will be held beginning at 8am ET, which can be accessed by dialing 1-800-814-4859 or through your BlackBerry® 10 smartphone, personal computer or BlackBerry® PlayBook™ tablet at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 10 am by dialing (+1)416-640-1917 and entering pass code 4501383# or by clicking the link above on your BlackBerry® 10 smartphone, personal computer or BlackBerry® PlayBook™ tablet. This replay will be available until midnight ET April 11, 2013.

About BlackBerry

A global leader in wireless innovation, BlackBerry® revolutionized the mobile industry when it was introduced in 1999. Today, BlackBerry aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Asia Pacific and Latin America. Research In Motion announced that effective January 30, 2013, the Company would operate around the world under the iconic name BlackBerry. The legal name of the Company has not changed, but the Company will do business as BlackBerry pending approval of the official change by shareholders, which will be sought at the Company’s Annual General Meeting later in 2013. Effective Monday, February 4, 2013, the Company commenced trading under its new ticker symbols “BB” on the Toronto Stock Exchange and “BBRY” on the NASDAQ. For more information, visit http://www.blackberry.com.

This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws, including statements regarding: BlackBerry’s new product introductions and the anticipated benefits of BlackBerry’s mobile computing platform for its customers; BlackBerry’s plans and expectations regarding its BlackBerry 10 smartphones; additional opportunities for the BlackBerry 10 platform; anticipated further improvements to drive efficiency and profitability while driving innovation, and the anticipated benefits to BlackBerry of such efforts, including its ability to drive better profitability at lower volumes and ability to extend those benefits to anticipated higher volumes in the future; expectations regarding BlackBerry’s marketing investment during the first quarter of fiscal 2014; and BlackBerry’s expectations regarding financial results, cost base, supply and chain and average selling prices for the fir st quarter of fiscal 2014. The terms and phrases “believe”, “focused”, “getting”, “opportunities”, “we are seeing”, “continuing”, “drive”, “improve”, “should”, “will”, “increasing”, “anticipated”, and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances, including but not limited to general economic conditions, product pricing levels and competitive intensity, supply constraints, the timing and success of new product introductions, BlackBerry’s expectations regarding its business, strategy, opportunities and prospects, including its ability to address its business challenges, and BlackBerry’s expectations regarding the cash flow generation of its business. Many factors could cause BlackBerry’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation:

BlackBerry’s ability to enhance current products and develop new products and services in a timely manner or at competitive prices, including risks related to delays in new product introductions; risks relating to BlackBerry’s ability to maintain or grow its services revenues including risks related to the anticipated decline in BlackBerry’s infrastructure access fees and BlackBerry’s ability to mitigate the impact of such decline on its consolidated revenues; risks related to intense competition, including potential strategic alliances or transactions within the wireless communications industry; BlackBerry’s reliance on carrier partners and distributors; risks relating to network disruptions and other business interruptions, including costs, potential liabilities, lost revenue and reputational damage associated with service interruptions; BlackBerry’s ability to implement and realize the anticipated benefits of its CORE program; BlackBerry’s ability to maintain or increase i ts cash balance; security risks; BlackBerry’s ability to attract and retain key personnel; risks related to intellectual property rights; BlackBerry’s ability to expand and manage its BlackBerry World applications catalogue; risks related to the collection, storage, transmission, use and disclosure of confidential and personal information; BlackBerry’s ability to manage inventory and asset risk; BlackBerry’s reliance on suppliers of functional components for its products and risks relating to its supply chain; BlackBerry’s ability to obtain rights to use software or components supplied by third parties; BlackBerry’s ability to maintain and enhance the BlackBerry brand; risks related to BlackBerry’s international operations, including risks related to recent political and economic developments in Venezuela; risks related to government regulations, including regulations relating to encryption technology; BlackBerry’s ability to adapt to recent Board and management changes;

BlackBerry’s reliance on third-party network infrastructure developers, software platform vendors and service platform vendors; BlackBerry’s reliance on third-party manufacturers; potential defects and vulnerabilities in BlackBerry’s products; risks relating to litigation, including litigation claims arising from the Company’s past practice of providing forward-looking guidance; potential additional charges relating to the impairment of intangible assets recorded on BlackBerry’s balance sheet; disruptions to BlackBerry’s business as a result of shareholder activism; risks related to government regulation of wireless spectrum and radio frequencies; risks related to economic and geopolitical conditions; risks related to acquisitions; BlackBerry’s exposure to fluctuations in foreign currencies; and difficulties in forecasting BlackBerry’s financial results given the rapid technological changes, evolving industry standards, intense competition and short product life cycles that c haracterize the wireless communications industry. These risk factors and others relating to BlackBerry are discussed in greater detail in the “Risk Factors” section of BlackBerry’s Annual Information Form, which is included in its Annual Report on Form 40-F and the “Cautionary Note Regarding Forward-Looking Statements” section of BlackBerry’s MD&A (copies of which filings may be obtained at http://www.sedar.com or http://www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on BlackBerry’s forward-looking statements. BlackBerry has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited. RIM, Research In Motion and BlackBerry are registered with the U.S. Patent and Trademark Office and may be pending or registered in other countries. All other brands, product names, Company names, trademarks and service marks are the properties of their respective owners.

Research In Motion Limited (doing business as BlackBerry)
Incorporated under the Laws of Ontario
(United States dollars, in millions except share and per share amounts)
(unaudited)

Consolidated Statements of Operations

For the three months ended For the year ended
———————————- ———————–
March December March March March
2, 2013 1, 2012 3, 2012 2, 2013 3, 2012
—————————————————- ———————–

Revenue $ 2,678 $ 2,727 $ 4,181 $ 11,073 $ 18,423
Cost of sales 1,603 1,897 2,781 7,639 11,848
———————————- ———————–
Gross margin 1,075 830 1,400 3,434 6,575
———————————- ———————–

Gross margin % 40.1% 30.4% 33.5% 31.0% 35.7%

Operating expenses
Research and
development 383 393 386 1,509 1,556
Selling,
marketing and
administration 523 487 646 2,111 2,600
Amortization 181 180 148 714 567
Impairment of
goodwill – – 355 335 355
———————————- ———————–
1,087 1,060 1,535 4,669 5,078
———————————- ———————–

Operating income
(loss) (12) (230) (135) (1,235) 1,497

Investment income
(loss), net (6) 18 5 15 21
———————————- ———————–

Income (loss) from
continuing
operations before
income taxes (18) (212) (130) (1,220) 1,518

Provision for
(recovery of)
income taxes (112) (226) (12) (592) 347
———————————- ———————–

Income (loss) from
continuing
operations 94 14 (118) (628) 1,171

Income (loss) from
discontinued
operations, net
of tax 4 (5) (7) (18) (7)

———————————- ———————–
Net income (loss) $ 98 $ 9 $ (125) $ (646) $ 1,164
———————————- ———————–
———————————- ———————–

Earnings (loss)
per share

Basic and diluted
earnings (loss)
per share from
continuing
operations 0.18 0.03 (0.23) (1.20) 2.23

Basic and diluted
loss per share
from
discontinued
operations 0.01 (0.01) (0.01) (0.03) (0.01)
———————————- ———————–

Total basic and
diluted earnings
(loss) per share $ 0.19 $ 0.02 $ (0.24) $ (1.23) $ 2.22
———————————- ———————–
———————————- ———————–

Weighted-average
number of common
shares
outstanding
(000′s)
Basic 524,160 524,160 524,160 524,160 524,101
Diluted 527,222 524,852 524,160 524,160 524,190
Total common
shares
outstanding
(000′s) 524,160 524,160 524,160 524,160 524,160

Research In Motion Limited (doing business as BlackBerry)
Incorporated under the Laws of Ontario
(United States dollars, in millions except per share data) (unaudited)

Consolidated Balance Sheets

March March
As at 2, 2013 3, 2012
—————————————————————————-

Assets
Current
Cash and cash equivalents $ 1,549 $ 1,527
Short-term investments 1,105 247
Accounts receivable, net 2,353 3,062
Other receivables 272 496
Inventories 603 1,027
Income taxes receivable 597 135
Other current assets 469 365
Deferred income tax asset 139 197
Assets held for sale 14 15
——————————————–
7,101 7,071

Long-term investments 221 337
Property, plant and equipment,
net 2,395 2,733
Goodwill – 304
Intangible assets, net 3,448 3,286
——————————————–
$ 13,165 $ 13,731
——————————————–
——————————————–

Liabilities
Current
Accounts payable $ 1,064 $ 744
Accrued liabilities 1,842 2,382
Deferred revenue 542 263
——————————————–
3,448 3,389

Deferred income tax liability 245 232
Income taxes payable 12 10
——————————————–
3,705 3,631
——————————————–

Shareholders’ Equity
Capital stock and additional
paid-in capital 2,431 2,446
Treasury stock (234) (299)
Retained earnings 7,267 7,913
Accumulated other comprehensive
income (loss) (4) 40
——————————————–
9,460 10,100
——————————————–
$ 13,165 $ 13,731
——————————————–
——————————————–

Research In Motion Limited (doing business as BlackBerry)
Incorporated under the Laws of Ontario
(United States dollars, in millions except per share data) (unaudited)

Consolidated Statements of Cash Flows

For the year ended
——————————————–
March 2, 2013 March 3, 2012
—————————————————————————-

Cash flows from operating
activities
Net income (loss) from
continuing operations $ (628) $ 1,171
Net loss from discontinued
operations (18) (7)
——————————————–
Net income (loss) (646) 1,164

Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Amortization 1,918 1,523
Deferred income taxes 87 (5)
Income taxes payable 2 (21)
Stock-based compensation 86 97
Impairment of goodwill 335 355
Other 36 9
Net changes in working capital
items 485 (210)
——————————————–
Net cash provided by operating
activities 2,303 2,912
——————————————–

Cash flows from investing
activities
Acquisition of long-term
investments (296) (355)
Proceeds on sale or maturity of
long-term investments 227 376
Acquisition of property, plant
and equipment (413) (902)
Acquisition of intangible assets (1,005) (2,217)
Business acquisitions, net of
cash acquired (60) (226)
Acquisition of short-term
investments (1,472) (250)
Proceeds on sale or maturity of
short-term investments 779 550
——————————————–
Net cash used in investing
activities (2,240) (3,024)
——————————————–

Cash flows from financing
activities
Issuance of common shares – 9
Tax deficiencies related to
stock-based compensation (11) (2)
Purchase of treasury stock (25) (156)
Net cash used in financing
activities (36) (149)
——————————————–
Effect of foreign exchange loss
on cash and cash equivalents (5) (3)
——————————————–

Net increase (decrease) in cash
and cash equivalents for the
period 22 (264)
Cash and cash equivalents,
beginning of period 1,527 1,791
——————————————–
Cash and cash equivalents, end
of period $ 1,549 $ 1,527
——————————————–
——————————————–

As at March 2, 2013 December 1, 2012
—————————————————————————-

Cash and cash equivalents $ 1,549 $ 1,910
Short-term investments 1,105 821
Long-term investments 221 207
——————————————–
$ 2,875 $ 2,938
——————————————–
——————————————–

BBRY Stock Moving Up Again After two Days of Declines

by Fernando Commodari, Ph.D.

March 26, 2013; 13:00 EST

BlackBerry (BBRY) shares picked up more than 1% to $14.38 after two days of losses following the U.S. launch of its Z10 . In an early note, Bernstein Research predicted a strong earnings report from the company on Thursday.  The new media deal with Viacom and Univision may be prompting the rise, along with the in-store release of the BlackBerry Z10 at T-Mobile.

“We expect gross margins 7 points ahead of consensus expectations, as Blackberry 10 units enter the mix and high margin service fees persist,” analyst Pierre Ferragu wrote in his note. “On that basis, we expect the stock to respond favorably to the quarter’s reporting.”

Yesterday:

Jefferies and Nomura Go Head to Head on CNBC

(I am long on BBRY; no comments on the Stock Market or specific stocks on this site are to be taken as advice for buying/selling any stock!)

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

by Fernando Commodari, Ph.D.

On March 16, 2013, in an interview with the Francophone:”LE GRAND JOURNAL DE NEW YORK” published on March 18, 2013, CMO of BlackBerry, Frank Boulben stated that “BlackBerry aims to be the leading provider of machine to machine (M2M) embedded systems”, using QNX and BlackBerry 10 devices.  The company has as a goal to be the leading innovator in mobile computing, not necessarily the biggest seller of cell phones like Samsung and Apple. With QNX in everything from slot machines, cars, home appliances, medical and other devices, BlackBerry can offer novel solutions and applications with these embedded systems.

In speaking about the new Z10, Boulben stated that the marketing effort, which will kick into high-gear on USA TV the week of March Madness, will emphasize the 4 differentiators of the new BlackBerry OS 10 devices: 1)the communications HUB, 2)the virtual and upcoming Q10 physical keyboards which offer the fastest and best typing experiences of any platform, 3)BBM with video chat, voice calling, and file share and 4)BlackBerry “Balance” which allows separating “work” and “personal”  aspects of one’s life on one device. Boulben refused to provide a number for the unprecedented cost of the BlackBerry marketing campaign.  He said he took the job because it offered him the opportunity to contribute to the greatest comeback story in tech.

For those of you who are fluent in French, the interview is available here:

“LE GRAND JOURNAL DE NEW YORK”  interview with Frank Boulben, CMO, BlackBerry

The next few weeks and months will be interesting  even if the BBRY stock, thanks to the short holds (that in my opinion are going to be left holding their shorts!), will continue on its roller coaster ride.  BlackBerry is well positioned with the new OS 10 devices, with its active NFC/VISA partnership(s) to lead the way with paperless payments.  These are the beginning devices; watch for more powerful BB10 devices such as the “Aristo” to launch near the Fall. Clearly, BlackBerry is focused on moving forward towards achieving its re-invention aspirations. After just a few days of the US in-store availability of the Z10, this product is already at number 8 of the top unlocked cell phones on Amazon:

Top Unlocked Cell Phones on Amazon

Users have given the Z10 4.5/5 stars:

Z10 Reviews on Amazon

With the upcoming “real time” ad campaigns BlackBerry 10 is set to “invade” iPhone and Android screens with full takeover ads :

BlackBerry Real-Time Ad Campaign

Stay tuned to this site to keep moving forward as BlackBerry is about to have some of the most exciting times since it invented the mobile communications platform, as it redefines mobile computing.

We’ll be reviewing the upcoming “BlackBerry Keyboard Challenges”  pitting the new virtual keyboard against Android and iPhone users.

This week, here in NYC, our home base for 20 plus years, we’ll be watching the T-Mobile (March 26, 2013) and Verizon (March 28, 2013) in-store arrivals.  No one knows the NYC area better than us; we understand the cultural nuances, and multi-lingual aspects, and have the in-store links to bring you timely, accurate, unbiased data/information, without the hype.  We’ll be watching the markets on Thursday, March 28, 2013, as BlackBerry reports its Quarter earnings.  You can count on us to tell it like it is!

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BBRY Closes Near $16 USD (up near 7%) Two Days Before Going In Store with New Z10 in USA

BlackBerry stock has gone up near $10 in about six-seven months or on average @$1.45/month, since September 2012:

This forward trajectory continues, and with the in-store placement of the Z10  in the USA by this Friday, March 22, 2013, I would expect the stock to continue to do well. Contrast this with Nokia’s stock which has remained flat over the last 6.5-7 months and to Apple stock which is clearly on the decline over the same period.  With the newly re-designed OS, BlackBerry 10, based on QNX, BBRY is uniquely positioned to move forward with the new embedded machine to machine (m2m) systems and to bring out more sophisticated hardware.

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Copyright 2013 (logo/sm, since 1993), all rights reserved, all content on this site!

I am long on BBRY.  The opinions on this site are my own and are not to be interpreted as suggesting guidance for the purchase or selling of any stock.

My Visit of Best Buy Stores in The NYC Area to Gauge BlackBerry 10 Readiness:$50 Gift Card On Pre-Orders

Today, March 12, 2013,  is the official start of pre-orders on the AT&T network with AT& T and in Best Buy stores.  I decided, on this lovely rainy grey day to visit 3 Best Buy stores: 1 in Rockland County, NY and 2 in Westchester County.  The 3 stores comprised 2 managers and 5 retail sales associates (RSAs). At the first store, the manager had no knowledge of the availability of the BlackBerry (BBRY) Z10 on pre-order/street date.  When he asked the associate at the Mobile center, she stated that she had no knowledge.  When I insisted they check, sure enough the manager found the info, and tried to sell me the phone.  At another store ( in Westchester County), the one associate behind the mobile desk was on the ball, she new that Best Buy was offering a $50.00 gift card (which can be used towards the phone purchase-next week or subsequently) with the pre-order of a BlackBerry Z10 on AT&T, with a deposit of $50.00 towards the phone at $199 with a two year contract.  At the third store, again the manager had no idea of the pre-order availability, and neither did the 3 associates behind the desk.  When I pressed them, the manager checked and agreed that in fact the BlackBerry Z10 was available on pre-order.  So, in my small sampling I found that only  20% of the associates I asked about the Z10 roll-out were aware of it, and none of the two managers.  It also appeared that a majority of the RSAs weren’t familiar with the re-designed BlackBerry Z10 with the QNX platform.

There were no model phones or any end-caps with information on the new devices, 1 week prior to the in-store availability.  Is a repeat of the lack-luster push of the Playbook in Best Buy stores about to materialize for the new Z10?

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A Big March to Madness in The USA For BlackBerry As T-Mobile, AT&T, and Best Buy Go To Market

by Fernando Commodari, Ph.D.

Yesterday, March 11, 2013, BBRY was up 14 % on NASDAQ, most likely as a sign that there is a bullish atmosphere surrounding the activities taking place with T-Mobile, AT&T and Best Buy.  I’ve written about the potential positive market reception in the USA in several past posts, see for example:

Interest In BlackBerry 10 By Country Shows USA is Up Top-In Top Five

Interest In BlackBerry 10 By Country Shows USA is Up Top-In Top Five

As pre-orders for business were offered by T-Mobile yesterday, and AT&T will take consumer pre-orders today for in-store pick-ups on March 22, 2013, while Best Buy also offers pre-orders starting today, momentum is beginning to finally build in the USA market. It remains to be seen how the masses set into motion the prospects for BlackBerry in a pivotal market for the company.  On Thursday, Samsung is expected to unveil its new Galaxy S IV which will likely be in-store by May and so BlackBerry will go head to head with its Z10 against a strong market presence by Samsung.  Now is the time for the BlackBerry  marketing machine to ramp up in the USA with ads on TV and social media to introduce the new QNX based OS10 to the American consumers, most of whom have visions of the old BlackBerry devices and little knowledge that a completely re-designed cell phone is now the power of BlackBerry.  Both AT&T and Best Buy will sell the Z10 in contract for $199 for a two year plan.

Preorders can be placed at any Best Buy location as well as over the 405 Best Buy Mobile locations across the U.S with the BlackBerry Z10 being available for purchase starting March 22nd.

The T-Mobile Business page:

http://business.t-mobile.com/blackberry-10-z

Preorder the BlackBerry Z10 on AT&T

http://www.att.com/shop/wireless/devices/blackberry/z10-black.html#fbid=wvPgyqVHQEI

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AT& T Press Release:

AT&T To Launch BlackBerry Z10 March 22 For $199.99, Pre-Sales Begin March 12, 2013

DALLAS, March 11, 2013 /PRNewswire/ — Wireless customers looking for a smartphone that helps them balance the important aspects of their lives will soon have a new option.  Beginning March 12, AT&T*  will kick-off consumer pre-sales of the BlackBerry® Z10 smartphone for $199.99 with a two-year agreement at http://www.att.com/z10.  The smartphone will be generally available for all customers, including corporate customers or those receiving a corporate discount, through all AT&T channels on March 22.

The BlackBerry Z10 is the first smartphone to launch with the re-designed, re-engineered and re-invented BlackBerry® 10 platform, offering customers a powerful and unique new mobile experience. It is the fastest and most advanced BlackBerry smartphone yet, and is designed to continuously adapt to a customer’s needs.

The BlackBerry Z10 features an all-touch keyboard and provides a modern and easy typing experience.  The BlackBerry Z10 also features a high-resolution 4.2-inch display and an 8-megapixel camera that records 1080p HD video.

“AT&T customers were the first to experience BlackBerry smartphones and services in the U.S. and we are thrilled to bring the next evolution, the BlackBerry Z10, to the nation’s fastest 4G LTE network,” said Jeff Bradley , senior vice president, Devices and Developer Services, AT&T Mobility. “Customers who have grown to love the tried and true BlackBerry experience will continue to enjoy the easy typing and the secure platform they expect with a fresh platform that lets them get more out of their smartphone with easy access to all their messages in BlackBerry Hub.”

BlackBerry 10 is a re-designed, re-engineered and re-invented BlackBerry platform that gives customers a faster and smarter experience that continuously adapts to their needs with advancements such as:

• BlackBerry® Hub acts as a central location for your emails and conversations.  You can easily peek into the Hub from any app with one swipe to see what’s new, then instantly swipe back to what you were doing.
• The new BlackBerry Touchscreen Keyboard learns how you write and adapts to your typing style so you can write faster and more accurately.
• BlackBerry fans have long loved BlackBerry® Messenger (BBM™).  The new BlackBerry Z10 features BBM™ Video and Screen Share so you can catch up face-to-face and share the content on your screen** with your friend or co-worker.
• Taking photos and creating memories is easier with Time Shift, an astonishing camera feature  that captures the moments before and after you press the shutter to let you create the best shot, and BlackBerry Story Maker, which lets you weave those moments together to create a movie in just a couple of swipes.
• BlackBerry Balance™ technology allows you to use your Z10 for work and play without compromising the security of your business-related content when connected to BlackBerry Enterprise Service 10.

The BlackBerry Z10 will be the first BlackBerry smartphone to run on AT&T 4G LTE, the nation’s fastest 4G LTE network***. AT&T has the nation’s largest 4G network, covering 288 million people.***

AT&T is also launching the new BlackBerry® Enterprise Service (BES) 10 solution, which gives AT&T business and government customers with BlackBerry 10 smartphones secure access to work email, “behind the firewall” applications and data, and offers other security and advanced enterprise mobility management features.  BES 10 provides an additional option for AT&T enterprise customers to choose from when deciding which Mobile Enterprise Management solution best serves their needs. Customers can also benefit from AT&T’s extensive experience helping companies create comprehensive mobility strategies.  AT&T leverages best practices and proven frameworks to address nearly every enterprise mobility challenge.

For more information, please visit http://www.att.com/z10.

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Interest In BlackBerry 10 By Country Shows USA is Up Top-In Top Five

by Fernando Commodari, Ph.D.

Recently, I wrote about:

Indications That BlackBerry Will Do Well in The USA With OS 10

I’d like to provide an update, as our hits of (near 1000) people interested in side-loading android apps on the BB10 devices have reached twice the level of the last such post (above link).  Thus, the findings of these 1000 people showing interest in BB10 are more significant.  As the map below shows, Canada tops the list with the USA, UK, India, UAE, Germany, Thailland, Indonesia, France, Malaysia, Spain, Singapore, Saudi Arabia, Russian Federation, SA, Italy, Mexico, Brazil, The Netherlands, Turkey, Colombia, Argentina and other countries then following.  What I find interesting, is that the USA is right behind Canada, while being the only country of the top 10 where BlackBerry Z10 phones have yet to be in-store. The population of the USA is 10x that of Canada, so in terms of actual numbers, we might expect 10x more Americans will purchase Z10 devices. With all the relentless negative press and the uncertainty in BlackBerry’s marketing prowess and carrier commitments to selling the devices in-store, I would not expect to see this actual scaling.  There is interest in the Z10 and OS 10 products in the USA, as we can clearly see from the figures below, of (near 1000) people interested in side-loading android apps. I would expect the turnover from iOS, and Android devices to likely be the same in the USA as in the UK/Canada, on a percentage basis, even if the percent of the USA population actually purchasing Z10 phones who buy cell phones might be less predictable, yet with substantial in-store/retail purchases in the USA.

 

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