RIM May Need To Write Off $1 Billion In Inventory

benfrog writes "Blackberry maker Research in Motion may need to write off more than $1 billion in inventory, according to Bloomberg. The potential 'writedown' comes after RIM took a $485 million pretax charge to write down the value of its PlayBook inventory in December. RIM has said it aims to save $1 billion in operating costs this fiscal year by cutting its number of manufacturing sites and is 'reviewing its organizational efficiency' across the company, which may lead to job cuts of 2,000-3,000. Its shares have tumbled 75 percent over the past year and are down 90 percent from their all-time high."

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Translation

[mr1911]

by cutting its number of manufacturing sites and is 'reviewing its organizational efficiency' across the company, which may lead to job cuts of 2,000-3,000.

No need for manufacturing sites or employees when sales have fallen off a cliff.

Amazing amount of mismanagement

[Y-Crate]

NY Times

Since 2007, RIM has introduced 37 models. The company, in a statement, said it did not know how many models were on the market.

Adding to the shopping confusion are RIM’s product names, which generally rely on four-digit model numbers and sometimes have different products sharing a name. The BlackBerry Torch 9850 and 9860 are touch-screen phones that are on some shelves next to the BlackBerry Torch 9800 and 9810, touch-screen phones with slide-out keyboards. (The model number differences reflect models adapted for different cellphone systems.)

By contrast, Apple has introduced only four iPhones since 2008 and all were basically the same phone with differences in the amount of storage, or upgrades from older models.

Ironic that RIM is losing-out to the likes of Apple, by making the same mistake Apple did back in the dark days of the '90s, when it seemed like there was a new Performa out every week.

Re:Amazing amount of mismanagement

[PCM2]

Ironic that RIM is losing-out to the likes of Apple, by making the same mistake Apple did back in the dark days of the '90s, when it seemed like there was a new Performa out every week.

Exactly this. When Jobs came back to Apple, he drew a box on a whiteboard and drew a cross through it. Four quadrants: Pro/Consumer on top and Desktop/Portable along the side. Instead of all these crappy Performas and 4400s and what-not, Apple relaunched with four computer products, grand total. Those were iMac/Power Mac G3 and iBook/PowerBook.

Why can't RIM do this? It could probably get away with two models: BlackBerry (which has a nicer camera, movie player, and integrates nicely with Facebook) and BlackBerry Pro (which has slightly nicer build quality and some kind of easy VPN capability, or something). Model numbers disappear -- they just upgrade the hardware every year or two. It would go a long way to address the problem of sitting on too much inventory.

Then launch it with a decent TV ad campaign. "Imagine a phone... blah blah blah ... introducing the new BlackBerry, from Research in Motion." And then, when customers go to the store, they just tell the clerk "I want that new BlackBerry." Clerk hands him a box that says "BlackBerry" on it. Simple.

Never happen.

Re:HP should buy them

[Jeng]

If HP was smart,

They've outsourced their intelligence to the lowest bidder.

Re:HP should buy them

[sootman]

> Honestly, wouldn't that be a legit Apple killer than
> enterprise shops would embrace en-masse?

No.

The thing is, to dethrone a king, you can't be "about as good as" or "as good as and slightly cheaper" or "10% better in some key ways" or even "15% better across the board." You have to be a LOT better--like a night-and-day different--to overcome all the inertia of a large installed base. The last time we saw that happen was in 2007.

Apple might not have the absolute world's best email client but pretty much every major company is happy with it (and all the other stuff it does) so someone else coming out with a whole new device that is slightly better in some ways is not going to gain any traction. Apple is so far ahead (in terms of overall quality, customer satisfaction, number and quality of apps, etc.) that I'm guessing it'll be literally 5-10 years (if ever) before they aren't in the lead.*

HP and BB both tried to displace Apple once and failed. They pulled out all the stops and each managed to create products that were roughly comparable to 1- or 2-year-old Apple products. No freaking way will those two be able to put their corporate heads together and produce, in 12-24 months, something substantially better than what Apple will be producing at the same time in the future.

Tying two anchors together does not result in something that floats.

* They may or may not be actually leading now in terms of raw units out there in the world, but a) they're doing far better than any single competitor in the smartphone arena, and b) they are taking the vast majority of the industry's profits -- about 3x their one and only really profitable competitor.