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Blackberry and Google Inc (NASDAQ:GOOGL) have announced a new partnership after which Android users will be able to use BlackBerry Ltd (NASDAQ:BBRY) specific apps and Blackberry users will be able to download and use Android apps. This is a major shift in the strategy of BlackBerry Ltd (NASDAQ:BBRY).

Not so sure about the "major shift" part.

Here's the thing -- since 10.0 the BB10 operating system could run Android apps.  Originally you had to repackage them into BAR files, but that was trivial to do with a few minutes of time.  Then BlackBerry included (in 10.2) the ability to load APKs directly.

However, going all the way back to 10.0 BlackBerry installed a "stub" file in the operating system that prohibited loading of the Google Play components.  They did this even though the stub itself was non-functional.  By including that in the base operating system load (which you can't tamper with as BB10 security prohibits it, and as far as I'm aware nobody has managed to crack that either as the security model is actually quite-solid -- unlike essentially all Android and IOS devices) when you try to load it the system rejects it since it's already present and marked non-replaceable.

In short what BlackBerry did was blacklist this particular piece of code -- and quite-specifically aimed in that direction.  This is why, for example, you can load the Play components on a Kindle or other "non-Google-blessed" Android device and it works, but attempting to do so is rejected on all BB10 devices.

I have long wondered what BlackBerry's motive in this is and a couple of years ago called on them to drop that.  Yes, there's a potential copyright problem for users that load Google's code on an "unblessed" device, but that's not BlackBerry's problem; if Google gets upset at someone unauthorized doing it their ire is not aimed at a company that didn't prevent it.  No, there had to be a business reason for it, and it almost-certainly was not a function of fear of lawsuit nor of market share loss; the number of people willing to hand-load components like this is non-zero but in terms of percentages of the userbase it's lost in the noise.

Now it appears that the motivation may have been some sort of negotiation that was taking place between Google and BlackBerry.  That negotiation may have gone nowhere under Thor, but that doesn't mean that Chen is equally incapable of closing the deal.  In point of fact it appears Chen has closed a number of cooperative deals of late in the Android space, including with Samsung both in their phone product and in the new, just-announced secure tablet space.

Is a deal to make Play available on BB10 coming?  Maybe.  And if it does, then suddenly BB10 becomes not a competitor per-se but rather a superset of the Android handset space, perhaps aimed at the enterprise and BYOD market.

Google has to be aware that Android is riddled with architectural weaknesses that are not particularly their fault, but rather stem from the design goals of the product.  It simply was never intended to be a secure enterprise operating environment, and trying to bolt that on after the fact is an entirely different approach than starting there with that as your original design intent.

There's been zero attention paid to this announcement in the press, but that doesn't surprise either -- few so-called analysts give a good damn about privacy and security, nor do they want you to care.  App publishers care even less, and in fact a recent study (which Google cockblocked with a code change in later Android versions) showed that apps often request your precise location as often as once every 10 minutes even when not being used.

In other words just by virtue of loading such an app on your phone you are transmitting your exact location on an all the time, everyday basis to a large number of firms and there is little or nothing preventing that data from being used -- or misused.

I don't know if we'll get any color on this Friday on the conference call, but it certainly bears watching.  This much I do know -- most Android apps run just fine on BB10, and the percentage of them that will and do has only gone up (a lot) over time.  At the same time the security problems with various mobile operating systems, along with the privacy concerns, have gone mostly unheeded.  The time will come when a major corporate data breach is traced to one of these devices and when that happens the potential for a major and instantaneous mood shift is very high.

Google and Apple are not prepared to address that, if and when it happens.

Guess who is.....

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I need a new keyboard after spitting my coffee all over it....

(Bloomberg) -- After years of complaining about having to pay for obscure TV channels they never watch, American consumers might finally be getting their way.

The industry buzzword is “skinny bundles,” or Web services from providers such as Dish Network Corp. and Apple Inc. that offer just a few popular channels at a lower price.


Let's run some "fuzzy math", shall we?  An hour of standard-definition (who's satisfied with that these days?) requires roughly 1Gb of distinct, on-demand data delivered to you.  High-def requires roughly 4Gb/hour and 4k about 4x that much!

So let's say you have a nice, reasonably-modern 1080p "Television" and want to watch Apple TV for 4 hours/day.  You're going to need about 16Gb of data, all of it delivered in real time with near-zero latency, to watch that television.

That's 480GB/month and by the way that's per television, per-program!

This is the problem with so-called "on demand, unbundled" programming, in short.  Cable TV (and direct satellite) works differently because each channel consumes bandwidth on the cable exactly once no matter how many people watch it.  The load on the plant does not change based on viewership, in short.

Now here's the kicker and the part that nobody in the so-called "media" seems to understand (but I sure do, because I've done this sort of network design before): Cable internet is quite-heavily subsidized in terms of fixed cost by cable TV plant which must be in place to deliver television signals to your home.

Remove that by destroying that market while at the same time increasing bandwidth requirements by multiples (not percentages) and your cost is, on balance, very likely to go up -- a lot.

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Oh c'mon John.

The last few times T-Mobile's CEO went off on an Uncarrier spree, he revealed a way to bank the data people paid for but didn't use, and eased up its credit requirements for new phone buyers. Now, at a cozy studio space in New York City, John Legere has a new Uncarrier 9.0 initiative to show off and it's a little different than what we're used to: It's meant to make pairing businesses with T-Mobile service less of a pain in the ass than than it normally is.

In short: Pricing is dead simple, so companies with less than 20 lines pay $16 per line for unlimited talk, text and 1GB of LTE data. Oh, you're running a bigger operation than that? Lines'll cost you $15 instead, and you can set up business family discounts of up to 50 percent, too.

This sounded far too good to be true.  $16/line with 1Gb, unlimited talk and text plus $4.75 for pooled data on a per-gigabyte basis?  Ok, so that means you can put together a package that's about $26 for 3Gb of data plus talk and text.

Good deal, right, especially for small businesses!

Except.... it's not for small businesses because the first line is $50, not $16, and that's not prominently displayed anywhere.  In other words you have to have 10 lines before that "nice price" shows up.  

Few small businesses do.

How do I know?  I just tried to buy that mythical $26 plan, and, as usual, the fine (unpublished) print taketh away.

Oh, what's better is that the store (yes, a corporate store, not a dealer) had no brochure or even a printout from their computer available that gave me the entire rundown from Line 1 on up.

When I pointed out that from the plan I'm on now, if I desired to replicate it as a new customer I'd pay something like 55% more than I pay today for the identical package of services the nice lady behind the counter's "explanation" was that inflation was responsible.

That's why, of course, I can buy reasonably-comparable service at close to my current price on the same T-Mobile network right down the street with no commitments of any sort by walking into a WalMart and getting Straight Talk @ $45/month with no commitment of any sort (nor any of the junk fees that the carriers add to postpaid service such as "regulatory cost recovery") and which, I might add, also conveniently lets you choose to be on any of T-Mobile, AT&T or Verizon.

Make sure you compare apples to apples folks; when a flashy huckster is screeching at you there's usually some fine print somewhere that will take back some or all of what you thought you were getting.

PS: There's also a "no tethering" condition on these corporate rates too; so much for the "you bought your data, you should be free to use it" claims.

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2015-03-09 13:09 by Karl Denninger
in Company Specific , 572 references

Apple watch is the most personal device we have ever created.... (Cook)

Uh huh.

A watch you have to charge daily, and is useless without your phone (which must also be an iPhone) within 10' or so?


Prediction -- beautiful or not, expensive or not, this goes exactly nowhere in terms of market acceptance.

Write this one off as 100% sunk cost.

Update: 18 hour battery life?  smiley

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I have to chuckle at this one.

We think the success of BlackBerry’s turnaround hinges on its ability to grow its Enterprise Mobility Management (EMM) software business, where competitors include Mobile Iron, Airwatch (part of VMware (VMW)), and Good. BlackBerry has set a target of $500mn in Software segment revenues for FY16(Feb), up from $250mn in FY15. We expect it to fall well short of that target and model revenues of $426mn, for two reasons. First, our surveys show very low buying intentions for BlackBerry’s EMM solution. Second, its target implies that it would leapfrog the market leaders in just one year, which we view as unlikely given the competitors’ much better traction (based on our survey). Meanwhile, we forecast below-consensus Service revenues (down 47% in FY16E). While we see significant upside in Hardware revenues, those are “empty calories” as they are not profitable. Thus, we see widening losses based on the shortfall in high-margin Software and Services revenues.


First, both Good and Mobile Iron are literal cash bonfires and have no other business with which to maintain their operations.  Both are thus playing the old 1998 game of "E-before-anything-that's-an-actual-expense" game, in other words, the old burn rate computation nonsense.

We all know how that ended in 2000, and it will end that way again for firms that are doing the same thing.  Further, neither are actual integrated solutions and thus both are reliant on pathways that are subject to weakness not under their control.  In the physical world we call this security theater; in the cyber world we call this "hacked."  Or, if you prefer, "apple crisp" -- hard on the outside, gooey on the inside, penetrable with the single tine of a fork.

Second, BlackBerry's hardware sales are profitable.  Not as much as software, to be sure (which has a near 100% gross margin) but there's nothing supporting a claim that BlackBerry is selling hardware at a loss.

Next quarter's earnings are about three weeks out; the quarter has been closed.  The Classic was late, and that may well impact revenues.  However, Chen has thus far exceeded his targets in terms of reaching operating cash flow break-even, and you pay the bills with operating cash flow.

Goldman is also ignoring the recent Google partnership announcement.  In my opinion this is a monstrous mistake.  I suspect Google has figured out that it's not as easy as they originally thought making Android functionally secure; as I have noted for several years in this column the internal code in Android is, from my point of view (I've ported/adapted it twice on two different devices) a god-awful mess. Recent revelations of potential integer-overflow problems in core system components that go back effectively to the inception of Android is just one example, as are similar problems found in Webkit, which is (unfortunately) used internally by apps and yet is not under their control nor can they do anything about a security problem present in that part of the base code.

This is where the BB10 security model and recent QNX hypervisor announcement wins, potentially big.  Google needs an answer to the security problem on a forward basis as in my opinion it is just a matter of time before one of the "big hacks" that have been visited on corporations is traced to a mobile platform.

When that happens, and believe me, it will happen, the legal liability on at least a forward basis if not retrospectively will force older devices off corporate networks by the millions.

Google has no means of dealing with this at present and neither, really, does Apple.

I don't know if BlackBerry will be there with the answer when it happens, but they just well might.  And while the Samsung partnership is interesting simply due to Samsung's size, that Google is interested in the same sort of partnership deal implies that there may well by a melding of the minds in the mobile security arena.

A QNX hypervisor implementation could provide hard compartmentalization, well beyond what is available now.  I fully expect this to show up on devices well beyond the announced use in cars quite soon.

BlackBerry owns QNX.

PS: Goldman wouldn't have any sort of relationship with these competitors and thus have a reason to pump them and diss their competitors, would they?  Naw, that would never happen....(damn you folks in the trading world are stupid; you can't even look back one month at the news?)

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