We have been bullish on BlackBerry 10. It is mainly due to our thinking that the new BlackBerry10 operating system joined with BlackBerry safe network would make real value apart from the smartphone marketplace.
Our short term theory is that BlackBerry can increase its income retailing BlackBerry 10 smartphones to its long suffering BlackBerry patron base. The BlackBerry patrons are stepping up, & first demand for the new smartphone is pretty impressive. This is great & should increase several to many quarters of hardware increase quickening.
The contrarian row is the loss of future Services income each time the manufacturer retails a BlackBerry 10 smartphone to a BB6/7 user.
BlackBerry gets monthly income for its BlackBerry Internet Service for each user that utilizes a BlackBerry pre BB10 smartphone. Remember that BlackBerry also has business clients that utilize the BES service that are not affected, though that figure has been decreasing & is no longer the bulk of BlackBerry users.
This unlucky turn of events needs some math to find out just how profitable a BlackBerry 10 smartphone sale actually is to BlackBerry.
If the manufacturer retails a BlackBerry 10 smartphone to a network operator at $500 each (a reasonable supposition), & that smartphone gives a 35 percent gross margin, BlackBerry gets around $175 in gross profit per smartphone.
If the smartphone happens to be a substitute for a BIS subscribed handset, which gives $4 per phone every month ($4 being the average charge per smartphone when dividing BlackBerry Service income by its user base), than the existing value of that loss of future income works from $90 $130 replying on the duration of time one guesses the subscription will work (for our reasons, we will assume 24 36 months).