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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."
I've used all 3 major platforms professionally, and BB is so far behind now it's just pitiful. Remove the Federal workforce from the client base, and BB is a memory.
HP is convinced they need to embrace the 'post-PC' world. They could actually salvage part of their 2 billion investment of Palm and Web OS. BB has a terrible platform right now and is dying, but they have a great brand name, and some great apps. Their mobile email client is absolutely the best.
If HP was smart, they'd reach out to Google to help develop Android phones and tablets with some Web OS influence (some great UI concepts actually) and a BB email client. Honestly, wouldn't that be a legit Apple killer than enterprise shops would embrace en-masse?
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
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.
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I can only conclude that basically companies are just planting RIM hate and RIM apocalypse stories. I see them all the time. But yet if you actually used a Blackberry, as a smartphone (and not an App machine) it's pretty damn good. But yet we see it day after day all these RIM hate stories. Besides, why would you want, as a consumer, one less competitor in the field. Because all that means is the remaining ones will compete less, charge more, and give you less features.
Don't believe the hype planted by companies and their collaboraters in the media. Forget all the rest of the crap--if it's a good phone and you like it, buy it. And even though I use an Android phone now, I absolutely LOVED my two old BB's (old BB and that BB Bold 9700).
RIM still made $3.64 billion in revenue last year, for $197.5 million in profit (a huge drop from last year, but they are still making money). RIM definitely could still succeed, but not like this. They are still a massive company with a huge name-brand, they just need to figure out how to use that. It may be unlikely, but I wouldn't mind seeing them succeed: more competition in the smartphone industry could be a very good thing. I'd hate to see it turn into a pure Android/iOS duopoly with no chance of a third competitor (Windows Phone... doesn't really count).
"None can love freedom heartily, but good men; the rest love not freedom, but license." --John Milton
And now they're bringing in JP Morgan and RBC to do a strategic review of the company.
Maybe they can still salvage things.
http://www.huffingtonpost.ca/2012/05/29/rim-shares-halted-jpmorgan-rbc_n_1553968.html
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NY Times
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.
"Organizational efficiency" certainly sounds like job cuts. But hopefully it means RIM might take a look at its manufacturing efficiency, as well.
At Apple, Steve Jobs always invested heavily in modern, automated assembly lines for its products, because he realized that the problem of too much inventory is particularly risky for computer makers. If you think about it, technology products have relatively short shelf lives. You can't sit on a pile of inventory and sell it for the next few years, like you could if you were making hammers or dinner plates. By next year, your inventory of shiny gadgets might effectively be junk. So the key is to develop a manufacturing process -- and equally important, supply partnerships -- that allow you to manufacture products at an incredibly fast rate, so that you can respond to market demand rapidly. If the market wants tons of units, ramp up production. When it cools off, stop making more. Then you don't have to sit on so much inventory.
If RIM is sitting on $1 billion in inventory, it certainly sounds like it grossly overestimated the demand for some of its products at launch. But it also suggests that it either isn't paying close enough attention to the market numbers, or is unable to react quickly enough to them. Working on either one might save it some money.
Breakfast served all day!
On the plus side, at this rate it won't be long before RIM has no operating cost and is left with pure profit!
5 years is a long time in the mobile industry. Are you telling me your employees would be happy with a first generation iphone?
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From TFA:
Nowhere in that article does it suggest that 100% of the current inventory will have to be written off. A terrible writeup from someone who clearly has reading comprehension problems.
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....does this mean?
But yet if you actually used a Blackberry, as a smartphone (and not an App machine) ...
So a Blackberry is a "smartphone" if you use it as a phone and presumably as an email device, but any other use isn't "smartphone" but is instead an "app machine", which presumably means stupid shit like Angry Birds and not useful apps, like a SSH client or a mapping client or something else.
It sounds like the problem Blackberry has is that it's not a very smart phone.
The one that dropped $7 billion on trades recently? Oh dear.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Companies don't go burst while profitable and with sustainable debits only. Before they go burst, one of those must change.
Rethinking email
They actually are abandoning their legacy OS. While it may have been a great smartphone OS when originally introduced, its been pushed far beyond its design limits and is very much running out of steam.
The new OS in development, which is currently called "BlackBerry 10" (formerly called "BBX") is using the same basic modern architecture as everyone else. Under the covers, its using QNX (a POSIX-compliant realtime multitasking OS). On the surface, RIM is building a whole software stack and set of applications. They've got a new UI framework based on C++/Qt called Cascades. They're also supporting a variety of additional development options, including raw native code (for game developers), HTML5-based apps, Adobe Air, and even the "Android runtime".
They've also been holding a whole series of developer events to promote the new platform, and are seeding developer devices to help everyone get started with it. If you actually dig up and see what they've been working on, its obvious that they're dead serious about moving forward to the future.
Of course this all takes time, but they are fully committed to building out the new platform. They've even engaged the whole developer community directly, in more ways than many realize. They've been posting a ton of open source content, and have made many of their developers and program managers directly accessible to the developers out there in the community.
So people, please stop thinking they're some stodgy company still trying to push 5-year-old phones. They've changed a lot since then. It just takes time for everything to come to market, and even more time for the popular-press (who seems to have negative retorts "in the can" prior to RIM press releases being published) to notice.