BlackBerry Ltd Passport, Classic Sales Weak: Morgan Stanley

Aman Jain
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BlackBerry Ltd Passport, Classic Sales Weak: Morgan Stanley
jieyirain / Pixabay

BlackBerry managed to sell only 8,000 units of the Classic and Passport, which is nowhere “close” to what sales of the two handsets should be, stated Morgan Stanley in a report. The firm reiterated its $7 price target on the Canadian firm with an Underweight rating.

BlackBerry a hard sell to enterprise, individual customers

Both phones were launched last year through Amazon, and recently AT&T started selling them on its network. According to the research firm, a meager 8,000 units of the Classic and Passport were sold, which is far fewer than the 2 million to 3 million target that BlackBerry needs in the 2016 fiscal year. Not just to individual customers, but BlackBerry is also finding it challenging to sell its phones to enterprise customers, which have been a longtime fan of BlackBerry devices.

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According to Morgan Stanley, the Canadian company will fall short of its $500 million software revenue target to compensate for the hardware business, and the company will not be able to “get anywhere close” to this target.

Focusing on security and services

Last year the Passport was seen as a promising device as the company garnered impressive initial sales numbers. The second batch also sold quickly. Toward the end of last year, the Canadian smartphone maker launched the Classic, and in North America, the preorder inventory was sold out in December. Amazon has been selling the unlocked version without a contract since the phones were launched.

The Waterloo, Ontario-based company is in its turnaround phase, and CEO John Chen has clearly outlined that his aim is to focus on software and services rather than hardware. Just last week, the company launched the BlackBerry SecuTablet, a high-security tablet for government and enterprise customers. BlackBerry designed the tablet, teaming up with Samsung and International Business Machines. Whether or not the BlackBerry SecuTablet will drive the stock ahead has yet to be seen.

On Monday, BlackBerry stock closed down 0.92% at $9.72, while year to date, shares of the Canadian firm are down almost 12%.

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Aman Jain
https://www.valuewalk.com
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@wordpress-785388-2679526.cloudwaysapps.com
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115 COMMENTS

  4. I sent BB enough information, if they would have carefully studied what I sent them, we would not be talking right now. BlackBerry is to blame for disregarding something of importance.

  8. Why should they believe in YOU?! Just why?!… who are you?! What have you done, so any big or even small company believes in you?!
    If you have 200 projects… just explain one.. the least important so anyone can understand your Brilliance?1

  9. Perfect sense… A company without profit can’t pay dividends… But BlackBerry is turning to profit.. and Soon will share dividends… and the SP is going to grow much more than the one of an already profitable company! …and this makes pretty much sense!

  12. For the sake of all the investors that lost due to BlackBerry including employees. If BlackBerry is not going to believe and be bold, like they are asking their potential customers to do, they are two faced typical of how executives like to operate.

  13. I don’t care HBB its BlackBerry that is stopping it from going forward, Hence for the same reason they also are not. I have well over 200 project going on, So I am not the least bit worried.

  17. Please reply to the question I posted rather than posting something completely different or did you not understand there was a question.

  18. ty HBB I am currently working on other projects that proceeds acquired may fund my projects relating to secure communications solutions. Seeing as BlackBerry does not wish to believe and be bold and get in on the ground floor, I wont deal with them later.

  19. its only worth something if you can spend it. Apple is paying dividends BlackBerry is not. Are you going to leave your money in BlackBerry until its back to $7? or are you going to be smart and cash out now?

  20. The formula was a calculation that would give the capacity to be able to present a photon of light that appears to suspend itself in mid air. This relates to the theory of ” a light particle or a wave”

  24. You’re correct that I don’t know what direction you want to take it but I do know that is your problem, not mine. You failed to sell your idea to the point where the potential Customer has no idea what you’re talking about.

    Secondly, I don’t believe Mr. Chen is taking the company down the wrong path, no matter what you say.

    Lastly, you’re a failure and you still haven’t figured out that I’m trying to challenge you into changing your approach, so that on the off chance that you do have something good, you might sell the idea properly.

  25. ” had you invested $10,000 in BBRY when Mr. Chen took over as CEO your investment would be worth $17,600 today. That same day had you invested $10,000 in Apple it would be worth $14,900 today”

  28. So… where do we stand?! Did Thorsten or Chen shrunk BlackBerry?! You can’t just say one thing here and other in Optrends… that’s making up a lie… and it’s very ugly from you DEVVVV!!!

  29. I really hope that is a typo, and they did not actually publish 8,000 total Passports and Classics sold. MAYBE… just ATT in certain region?

    Then again, if it is a pimple face, straight out of college person writing the article, they might not know what a BlackBerry is.

    I love my passport, and was at a NYC financial conference, had 10 people come up and ask me what the device was and where to get it.

    Ran into a Passport at a local Starbucks too.

  30. I just cannot believe how Goldman Sachs a prestigious NY Investment Banker would even publish this. How low can a firm go to drop the share price so it can make an extra $2. Actually they had a return of a million phones on 9000 sales.

  32. you don’t even know my direction and saying no to it. But yet you know the direction of what path Chen is taking and you going with it knowingly that its wrong. HBB what are you thinking dude?

  33. Yup, and I agree with his direction. I disagree with yours. I refuse to put blind faith into you because you have done nothing but lie and cheat to make yourself look like some prophet that BlackBerry needs. Truth is, you’re not and until you accept that truth, you will never get over the hurt you continue to experience by failing to sell your idea.

  34. it doesn’t matter what price point you bought in at, if your leaving it in there anyways its not in your bank account. You are letting Chen spend it freely

  36. Thorsten was better than Chen, even though Chen said ” down comes the for sale sign” he decided instead to shrink the business down to nothingness instead. This is due to the inability to provide innovation, as to keep employees busy instead. RE: ” I also laughed when some analyst said that z10 and q10 returns exceeded sales last year.” The analyst did not mean that, he meant is some cases. ” some days retailers experienced that within one day they received more returns than sales of BlackBerry devices, and has happened in more than one occasion.

  38. well tell me how your making money of BB shares then? With the introduction of the way over priced tablet and Porsche smartphone I am surprise BB shares did not crash. I am sorry but nothing has changed at BB except the CEO

  41. I agree that the estimate sounds incredibly low. I also laughed when some analyst said that z10 and q10 returns exceeded sales last year. It turns out he was not far off the mark. I am long Bbry but every time I get close to break even, they seem to find a way to disappoint. That said, Chen is no Thor so I remain invested and cautiously optimistic.

  44. Oh OH guess what?? Re:

    “SaskTel customers, or potential SaskTel customers, who have been waiting for the carrier to drop the prices of the latest BlackBerry smartphones can now rest easy.

    For a limited time, SaskTel has chopped the cost of the 2-year contract price on the Classic to $0 and the Passport to $99. Other carriers are still offering these two Berrys for $50 to $250 on a 2-year plan. Might be a good time to hop on the sale, or wait a couple months until both devices hit $0.” Maybe this will prove my point that BlackBerry devices are simply not selling. I wonder if BlackBerry maybe should start paying people instead to use their smartphone but make them sign something stating they have to keep it.

  45. Like I said before, I sent BlackBerry a letter that included a formula that no one else could possibly know. If BlackBerry would have took the time to study what I have sent them, all would have been good by now, Because BlackBerry operates like you do, quick to say no prior to knowing if that really should have been said, its their loss. Certainly not my loss because I don’t care, as I was doing it more for BlackBerry than myself.

  48. Dave – out of 5 people (who I work with and know personally) who were given corporate device upgrades, 3 selected BB Passport, one picked Samsung Galaxy S5 and one picked iPhone 6Plus. All were free to choose whichever device they wanted. We both know your little channel check and my personal experience mean diddly squat, just as MS number of 8K is fantasy, at best.

  49. Devvv,

    Which retailers did you go to and in what period? Did the retailers actually stock the Passport because not many do. When you do a survey you are not supposed to go in and ask “Do you stock Blackberry Passports?” and when they say “No!” ask them how many they have sold.

  50. Devvv,

    Probably for the same reason you envisaged 98% of them being returned. Trying to force the share price down. He has a get out clause because he can say “I didn’t realise that was only one day’s sales”.

  51. And again, it’s how you represent yourself that fails to deliver the message/idea in an intelligent and professional manner. Your failure, not mine.

    You want people to respect you and your ideas, try a different approach.

  53. well then continue losing your investment, as you like saying no before knowing if that was the right choice. You remind me of BlackBerry. I could keep BlackBerry busy with well over 200 project, if they don’t want to investigate this on the off set chance it could be true then they don’t really care about pleasing investors. And I do not make up stories.

  55. And why would VW or FP even print it unless it has some creditability? hmmm I would be selling just in case, as you can always re-buy if BlackBerry is still open for business later

  56. Throughout my life time, I have been in many different places around the world and had, breakfast, lunch and dinner in all. I’ve seen homeless people but at no point have I seen anyone who was starving to death.

    By your logic, that means I can conclude that World Hunger issues do not exist.

  61. well if the Passport would have been launched as a mini keyboard tablet that’s one thing, but as a phone NO!! it looks like a CD case

  62. Really?! So now you resort to name calling?!… Shame on you DEVVVV…
    The Passport really is beautiful… the all black version and the red one are amazing!!! And you know it… I know for a fact that you want one…

  65. HBB what leads me to believe that this story could very well be true is because I went to a few retailers and asked how the Passport and Classic was doing, he told me haven’t sold one in weeks. It is this that leads me to believe that perhaps this story could very well be true. HBB go to a few retailers and ask yourself, you will see.

  68. The law of average generally hold true. I went to few retailers (personal survey) recently and weeks have went by without a single sale of the Passport or Classic whereas Android and Apple products are flying off the shelves. I don’t like making statement on news stories unless they are true of course.

  79. well I would have thought if Morgan was telling a false story why wouldn’t he make it sound believable? This is what makes me think it could very well be true.

  81. Well if upon CHen’s appointment to BlackBerry he would have said ” lose the Passport and Classic design, get the RIM sign back up” I would have then thought ” hmmm perhaps he is the one”. Seeing him holding up that Passport, I can see his forced smile and detect him thinking ” oh my god what am I doing here”? But then thinking ” oh well least I’ll get $20M like Thorsten did when I leave”

  84. I know what you “think”… The fact is that 8.000 is a lie, not odd… “Why would he state a number like that if he was trying to get people to believe him?” …can’t you guess?!
    “I know for a fact you thought the same thing when you first saw them too” … no fact here… Assumption… and a wrong one…

  85. never the less, it still seems odd that he said only 8,000 units sold. Why would he state a number like that if he was trying to get people to believe him? I’m sorry but when I first saw the Passport and Classic my impression was, they wont sell. LP and I know for a fact you thought the same thing when you first saw them too. If you bought one its only because you felt you should support them. A consumer should not have to feel that they should support a company, I call that charity.

  90. also the reason I say that is because a coffee buddy did buy a Passport. Well he came to the coffee one day using a different phone so I asked “what happen to your Passport?” he replied ” it was too cumbersome to use”

  92. it seems odd that they would only say 8000 units were sold if they were trying to upset the SP. For this reason I think they may be very well correct

  100. IDIOTS at MS! India ALONE sold 9000 Passports. And we are talking about really small BBRY market. LOL

    oh, BTW – guess, who is Good and Mobile Iron underwriter in their IPO???

  104. So does anybody have any sources with REAL passport and classic sales numbers that include direct to consumer, enterprise, and third/second world sales? (I’m assuming if 100k units are sold in on the streets of India, that this still counts towards Blackberry sales, right?)

    It would be appreciated. The financial report is coming up next week and some ideas on whether to sell or hold my shares would be great!

  107. I dont think people understand “channel” checks. Companies don’t just give out that info. The best they could do is call storefronts, or walk in and ask how many they have sold… I’ve asked about different phones from telus a few times for availability (of multiple brands) and they weren’t legally allowed to give out the information.

  108. just another nonsense article by Morgan Stanley to push the stock price down to help their short positions and they know BlackBerry cant fight back since their in the silent period now and cannot say anything until the earnings call next week.

  109. MS would have done some channel checks – basically calling stores and ask how many they sold of certain models. They would have zero visibility into direct sales to consumers or enterprise sales. It’s total BS.

  110. Since December only in India (until the end of January) more than 12000 Classics were sold (Imported… but it’s sold-out in most of the places…)… it’s easy to get these numbers from official sources in the web.
    Where did this guys got these numbers?!

  111. Aman – please fix your article. Fiscal 2016 just started for Blackberry so they have full 12 months to make the 2-3 million sales. 8K sale, if this is accurate, refers to sales in AT&T stores where Passport just launched. This does not include many units that sold through Amazon or Blackberry since the model launch. What kind of BS are you posting?

  115. They sold 200k Passports in the pre-order alone. Morgan Stanley is out to lunch if they think only 8000 devices sold between Passport and Classic. What a joke.

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