The most important question is: Will Software revenue ($67m in Q4) improve significantly? That is, will it improve once again by 20-25%?
Answer: Very likely, especially with the WatchDox acquisition. Also, keep in mind steady increases in QNX (increases reported the past 3 quarters in a row, even if no one except John Chen, James Yersh, and the BOD knows what the exact numbers are); increases in BBM revenue ("Meetings" is top 100 business app in 39 countries at Google Play & top 500 in 76 countries in the iOS Store); increased conversions to BES12 (and associated upselling); previous conversions to BES12 now fully past their extended free period; a full three months of service fees from the millions of BES10/EZ Pass/perpetual silver enrollees; fees from the newly introduced Zigbee certificate program; and other revenue from the BTS department under a highly motivated Sandeep Chennakeshu. My prediction is software revenue of at least $80m -- with hopes that it will be closer to "blow-out" levels.
The second most important question: Will hardware sales and revenues go down, hold steady, or go up? A linked question: What is the base number -- the 1.3m on which BB booked revenue in Q4 or the 1.6m "sold through" devices? It looks as if BB ought to get a flying start on its sales figures for Q1, given that sales of 300K devices were considered advanced enough in Q4 to be sold through, but through some accounting scruple not advanced enough to be booked as revenue. To meet last quarter's number of 1.3m devices, then, BB essentially had to sell another 1 million devices in total between March 1 and May 31. I see no signs of panic: no fire sales, no inventory clear-outs. Both gut and head tell me that sales will be closer to 1.6m this quarter than to 1.3m. This would mean hardware revenue could be as much as $75 million greater than it was in Q4, though I'll be happy with an extra $40 million.
The third question has already been answered: What will service revenue be? It was ~$309 last time, and BB guided for another 15% drop. That's approximately $47m. And everyone knows that in a couple of years this source of revenue will dry up. EOM.
The back of my envelope says BB revenues will be $80m (software) + $320m (hardware) + $262m (services) = $662m total. Of course, I'm hoping the number will be higher, but I'll be OK with this "hold-steady" number. The key takeaways for investors who do serious due diligence will be:
1. Software revenues rise significantly; Chen might actually be on track to hit his $500m software + $100m BBM targets by year end.
2. Hardware revenues stabilize. Average selling price improves again -- from $181 (Q3) to $220 (Q4) to $235? (Q1/16). BlackBerry has found its niche with highly praised unique phones. The work that remains to be done is to obliterate the app gap once and for all, perhaps through a tie-up with Google, and to get sales back up to 2 million per quarter