Blackberry Ltd (BBRY) Earnings Call Transcript: 2014 Q3, Q3 FY2015

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And the Classic goes to the market, as you know, a lot of the 9900 Curve users are “dying for it.” And so that of course will then turn off the SAF for those individuals that upgrade.

The math obviously is, I’m not go to be providing you the margin of the Classic but it is a positive margin and revenue of course is in the $400 plus. And but then I lose $3 to $5 a month when that conversion happens. Sometime over the lifetime of this will crossover.

I mean I know I’m beginning to be more complicated than I sound but the point is this is why we assume this 15% decline, that’s it. There is no really big science behind it at this point.

Simona Jankowski

Yeah, okay. Great, thank you.

Operator

We will go next to Mark Sue with RBC Capital Markets.

John Chen

Hey Mark.

Mark Sue, Managing Director at RBC Capital Markets

Thank you. Hi John. Hi, I actually paid $349 for my Classic.

John Chen

Well, you were there at our lodge and you are the one of the lucky one. We won’t sell at $349 now.

Mark Sue

Okay, thank you. Maybe just recognizing that the revenues will come, what about the carriers promise to push and promote any devices. BlackBerry has had a lot of new devices and a lot of the success is predicated on just the push by the carriers.

Maybe also if you can weave in the qualitative comments by the enterprises?

And then James a quick one for you, as we move towards software, notably perpetual with your subscriptions, will you share with us some of the billings growth so that we have some tangible evidence that you can get to your software revenue growth in the future?

John Chen:

You want a crack at it?

James Yersh

Yeah, I’ll start. I think the short answer to that Mark is once we get to a different model, we will evolve our metrics and that seems like a logical one to get too.

John Chen

Yeah, so you’re talking about the bookings and the billing?

James Yersh

Yes, the bookings.

John Chen

The bookings end of it, okay. And once you get probably mid-year…

James Yersh

We’ll evaluate that.

John Chen

Okay, well the first question is the carriers.

Mark Sue

Yes, the dollars at the advertisements to push the products as opposed to just BlackBerry pushing and promoting?

James Yersh

Well for a lot of the flags, well, John went through the list of some of them. That have at least gone through testing and have committed to it. You saw a lot of those in the press releases Mark that we put out on Classic time.

I think the big difference here is we’re seeing a lot of support from these carriers also to put it in the retail stores and have a physical presence there which was a bit of a change kind of where we’ve been with the carriers recently.

So I think even with that in itself shows a lot more momentum behind Classic than we have for a lot of the portfolio recently.

John Chen

And I think Mark your question really is, are you aiming at whether the cost will also jump up on our part?

Mark Sue

John, it’s more on the service providers will say yes, we’ll carry it, yes we’ll push it, but then we don’t really see the ad dollars, we don’t really see the promotions, we don’t see the excitement from the carriers, so I’m just trying to see how different it might be this time around.

John Chen

Yeah, with the Classic, everybody, all the carriers I spoke to are very excited and they will put out the dollars. In fact, if I’m not mistaken, Bell, just sent out flyers to… for Christmas shopping. A number of stores in Toronto that my guys visited they told me that Classic was prominently displayed in the stores.

So maybe you should go to the stores. I know Telus and Bell and Rogers are spot on, on those and AT&T, as you heard the other day is committed to put in 2,200 retail stores. Vodafone in UK, I mean things are happening.

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