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Blackberry Portables

RIM May Need To Write Off $1 Billion In Inventory 220

Posted by Soulskill
from the build-a-fort-out-of-blackberrys dept.
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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RIM May Need To Write Off $1 Billion In Inventory

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  • Not Surprising (Score:2, Interesting)

    by Anonymous Coward

    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.

    • Re:Not Surprising (Score:4, Interesting)

      by norfolkboy (235999) * on Tuesday May 29, 2012 @05:21PM (#40148497)

      Not quite.

      It's very popular in the UK for teens, who use BBM rather than SMS.

      Other than poor chavs and kids, you're right.

      • by evilRhino (638506)
        They could just as easily switch to a cross-platform alternative like XMPP (Google Talk) or a proprietary alternative on a better platform like iMessage.
        • Re:Not Surprising (Score:5, Interesting)

          by mwvdlee (775178) on Tuesday May 29, 2012 @06:05PM (#40149007) Homepage

          Here in the Netherlands (and as I understand it, most of Europe atleast), WhatsApp is the current chat method, and it's available on most mobile platforms, including BB. It's still proprietary, but atleast it's practically platform agnostic.

          • Here in the Netherlands (and as I understand it, most of Europe atleast), WhatsApp is the current chat method, and it's available on most mobile platforms, including BB. It's still proprietary, but atleast it's practically platform agnostic.

            And it still doesn't tell you when someone you're chatting with is typing. Or when they read your messages. And it doesn't have the same attachment capacity. Oh, and as far as I can tell all my contacts get sent to WhatsApp.

            I was on BB for the last three years and just moved to Android, reluctantly. There's a lot to be said for the platform, but the lack of actual, fully-functional BBM is glaring. Google Talk will do attachments, but not delivery notification. WhatsApp the reverse. There just isn't

      • Re:Not Surprising (Score:4, Interesting)

        by hairyfeet (841228) <{bassbeast1968} {at} {gmail.com}> on Tuesday May 29, 2012 @06:08PM (#40149055) Journal

        Well maybe we'll get lucky and they'll be dumping playbooks on Woot! like HP did the Touchpads, gotta look on the bright side you know.

        But RIM really deserves what is happening to them, another classic case of a company that tried to rest on their laurels instead of staying ahead of the game and now they are so far behind its practically impossible to get back on top. You might bet by with that in some businesses but tech is NOT one of those. We have seen it over and over again, Palm, MSFT with WinCE, if you don't try to stay ahead of the pack in mobile tech you simply get run over.

      • by firex726 (1188453)

        Isn't it popular in India for BBM as well?
        Seems as a status symbol, like the iPhone in the states; everyone whose anyone will have one.

    • Re:Not Surprising (Score:4, Informative)

      by Anne Thwacks (531696) on Tuesday May 29, 2012 @05:30PM (#40148581)
      Perhaps you live in America?

      Here in the UK, BB ownership is very high. However, most users also have another device.

      There are two BB communities:

      Teenagers, who want BBM for a variety of reasons, and remote wipe for many reasons.

      Business users who want integration into corporate infrastructure.

      The remaining markets are babies, the elderly and the unemployed, who are not very lucrative.

      BB's current problem is that they have saturated the market with long lived devices, and are trying to sell devices to people who dont want them. They need a strategy that trades on that position instead. An old BB works fine, and there is no need to upgrade. Keep supporting the existing customers, and BB will live on, with a solid market base that will sustain them for a long time to come. Trash their customer base by abandoning the existing devices, and they really will die. Maybe they need a paid software upgrade bringing tangible improvements to the really old units?

      • by mwvdlee (775178)

        The remaining markets are babies, the elderly and the unemployed, who are not very lucrative.

        And non-business-user adults.
        I don't know the UK situation that well, but I think it might be an interresting market.

      • Re: (Score:2, Interesting)

        by snowraver1 (1052510)
        Firstly, I like RIM. I currently have a 3 year old Blackberry Tour that still works fine. It's battery still lasts for days depsite it's age. The apps are pretty crappy, yes, but that's okay for me. It workes great as a communication device, which it is.

        I also recently bought a playbook (6 months ago), and it is really great! At $200 I don't understand why everyone doesn't have one. It is really a great peice of hardware, and the QNX OS is really good. In 6 months, I have had numerous application le
      • by puto (533470)
        Blackberry has not made a long lived device in the past two years.
  • HP should buy them (Score:5, Interesting)

    by Enderandrew (866215) <enderandrew.gmail@com> on Tuesday May 29, 2012 @04:47PM (#40148027) Homepage Journal

    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?

    • by Jeng (926980) on Tuesday May 29, 2012 @04:56PM (#40148173)

      If HP was smart,

      They've outsourced their intelligence to the lowest bidder.

    • by Eponymous Coward (6097) on Tuesday May 29, 2012 @05:04PM (#40148277)

      Almost the entire WebOS team has been hired by Google. I don't think HP is doing anything with WebOS anymore.

    • by PCM2 (4486)

      HP should buy them? Why, to put them out of their misery? As you point out, that 2 billion "investment" in Palm was more like a bullet to the head. HP might be good at pushing cheap laptops into the consumer channel, but it has shown no real talent for products in years.

      HP has this bad problem of not being able to decide whether it wants to be Apple or IBM. The problem is, it's neither and never has been.

      • HP at this point has no identity. They tried selling off their PC division while publicly saying there was no future for the PC market, which was fucking idiotic. Way to devalue what you're trying to sell off. They abandoned their WebOS investment way too early and never captured developer interest even for a moment. They still make good servers and laptops, but they don't own those markets.

        Either HP makes a bold move to salvage the mess up to this point, or they die out.

    • by ArhcAngel (247594)
      hp could have made WebOS work had they stuck to their guns...they turned and ran after a month just like they always have when profits weren't forthcoming.

      Considering a member of Apple's board of directors [businessinsider.com] still uses a BlackBerry I'd say the platform is decent enough and BB OS Ten looks to be hitting all the right chords except timeliness.

      Their mobile email client is absolutely the best.

      I believe you meant to say their mobile ecosystem [n4bb.com]. Their email client is good but without the RIM infrastructure it would be just another email client.

      I want RIM to

    • by sootman (158191) on Tuesday May 29, 2012 @07:43PM (#40150155) Homepage Journal

      > 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 [twitter.com] -- about 3x their one and only really profitable competitor.

  • Translation (Score:5, Insightful)

    by mr1911 (1942298) on Tuesday May 29, 2012 @04:47PM (#40148031)

    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.

  • 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 comp

    • by tibit (1762298) on Tuesday May 29, 2012 @04:53PM (#40148119)

      Apparently, Blackberry-the-smartphone is not enough to keep RIM afloat. There you go.

    • by MadCow42 (243108) on Tuesday May 29, 2012 @04:55PM (#40148141) Homepage

      RUFKM?

      Do you even have a current BB phone? I do, and I hate it with a passion, but I'm stuck with it because it's all my company supports for corporate email.

      Battery life? half a day if I'm lucky.

      Usability? It freezes for minutes at a time.

      Apps? Really? Have you compared to any other platform like Android or iOS?

      Talk about astroturfing... you're doing it pretty well.

      (no, I have no affiliation with RIM whatsoever, besides being hampered by having one of their crappy devices - the 9960)

      • by epiphani (254981) <epiphaniNO@SPAMdal.net> on Tuesday May 29, 2012 @05:03PM (#40148275)

        Funny, I have a current Bold 9900, and the battery easily lasts a full day with heavy email use and several hours of conference calls. I'm not sure what you're using, but I haven't run into the issues you're talking about since the original Bold like 4 years ago.

      • Re: (Score:3, Insightful)

        by MogNuts (97512)

        Latest one I used was the Bold 9700. Though I saw the new 9900 and I think ergonomically it's the best designed phone I've ever used. It feels perfect for typing, wonderful keyboard, wide enough to hold but not too big to be unwieldy.

        But anyway, I seriously doubt you on the battery life. I used to get like almost a week with whatever OS was pre-BB 7. And neither iOS or Android get more than half a day either anymore. iOS was like 2 days in the 4.x days (I had a 3GS too). But with 5.1, it's gone to crap.

        Apps

        • by Kotoku (1531373)
          Android apps I need for work include a full office suite, usb host control, document converter, checklist maker, photo editing apps, SSH, wireless printing, a web browser that doesnt stink, ability for 4g speeds to push and receive video.....should I go on? Blackberry isnt as productive and personally I cant type well on those tiny keys but get 60wpm on screen via my galaxy s2. Oh ... its also fun when not working.
      • I get 3-4 days up time without a recharge; 2-3 days with heavy usage. You probably need a new battery. You can just buy one and swap it out, unlike some others that you mention.
    • Re: (Score:2, Insightful)

      by sl4shd0rk (755837)

      I can only conclude that basically companies are just planting RIM hate and RIM

      It's not that diabolical. The press is just magnifying the generalized "shruggs" of the industry when the subject of RIM comes up. RIM has waited far too long to try and resuscitate their potential. They've been very adamant about any kind of radical change and seem convinced they can continue to do foolish things (releasing their fondleslab and *then* nixing it's Android support) and remain on life support with tax dollars from government contracts. In the end, they will probably file chapter 11 and leave

      • by Nexzus (673421) on Tuesday May 29, 2012 @05:01PM (#40148245)

        In the end, they will probably file chapter 11 and leave the debt with the US taxpayers.

        I know it's hard to believe, but RIM is a Canadian company.

    • by PCM2 (4486) on Tuesday May 29, 2012 @05:07PM (#40148325) Homepage

      I don't hate RIM. But I do think RIM is dying. The disease is reversible, I think, but nobody over there seems to be seriously looking for a cure. TFS says RIM stock is down 75 percent from last year alone. Imagine a patient who has lost 75 percent of his body weight but keeps insisting, "I'm not sick!"

      My own experience: My last three phones before my current one were BlackBerrys. But I started looking around and comparing prices and it seemed to me that other phones could provide at least most of the functionality that my BlackBerry gave me, plus more besides. I also wasn't impressed with the hardware of the current crop of BlackBerry devices. It seemed like RIM's focus had drifted from its core business market and it was trying to sell camera phones to college students. They didn't seem like they were targeting me anymore, and other manufacturers were. So I switched to Android.

      I'd be more than happy to switch back to BlackBerry if they'd show me a really great phone, though. Do they have something like that in the works? I don't see it. The market doesn't seem to see it, either.

      You know who you remind me of? Me, when I was a Mac OS admin in the late 90s. Back then, everybody thought Mac users were a cult. We were all convinced our platform was the best, but everybody else kept focusing on how Gil Amelio had fucked up a once-great company. We Mac fans were right, but so was everybody else. It took Steve Jobs' return to get Apple back on track. Unfortunately, I don't think RIM has a Steve Jobs.

      • I don't hate RIM. But I do think RIM is dying. The disease is reversible, I think, but nobody over there seems to be seriously looking for a cure. TFS says RIM stock is down 75 percent from last year alone. Imagine a patient who has lost 75 percent of his body weight but keeps insisting, "I'm not sick!"

        Is it curable? Activesync isn't quite what Blackberry has, but it's good enough for most things, so on the Exchange-hookup end of things, RIM doesn't have any particular edge. Yes, it could go full Android, b

        • I think you are on to something--purchased for patents. Plenty of people would want them for that, and they are so cheap these days. There was also a thought about facebook buying a phone company. I dunno that RIM is the model hipster that facebook would want, but they have atleast some talent.

        • by PCM2 (4486)

          I think RIM will either die, or will be bought up. I don't know who exactly would buy it up, though. I can't imagine Microsoft wanting to end up competing against its own Windows offerings by buying RIM, but there is still some RIM technology that might be attractive to someone.

          I think it's sitting on some lucrative patents. If someone twists my arm and forces me to say what I think might happen, I usually say licensing its tech is probably the next step. The Nokia 999, powered by Windows Phone Featuring BlackBerry.

        • by Swampash (1131503)

          I'm reminded of reports that RIM management's response to the iPhone specs at release was "that's impossible".

      • by ppanon (16583)

        You know who you remind me of? Me, when I was a Mac OS admin in the late 90s. Back then, everybody thought Mac users were a cult. We were all convinced our platform was the best

        So, back when Apple only had MacOS 9, which was the only contemporary PC O/S which still relied on co-operative multitasking? It had some nice UI design and a good UI programming interface, but it still had a fundamental O/S weakness which even Windows had eliminated in moving from Windows 3.11 to Windows 95. Apple had struggled for

    • I absolutely LOVED my two old BB's

      And I absolutely LOVED my Handera 330 (a Palm OS device). Just like your old BB was a good phone, the Handera was a pretty good "app machine". These days, you have to be good at both. RIM is going to be a great business school case study in what happens when your market gets disrupted and you pretend everything is still fine.

      • by MogNuts (97512)

        Hah good 'ol Palm. I had one too (Treo). I see your point, but c'mon at least BB has the ability to do Apps and modern smartphone features. ;-) I can't use the Treo for Pandora, Dropbox, Google Maps. :)

      • by noh8rz3 (2593935)
        I loved my NES. Except for the part where I had to blow on the cartridges. Now I use OnLive cloud gaming, and I love that too.
    • ....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.

      • by MogNuts (97512)

        SWB, your UID is too low to *not* know that Angry Birds are NOT useful apps. Your post makes no sense. And u also should know what the intent of my sentence was because with your UID (i'm guessing you've been compiling kernels since the 1.x days) you've been around long enough to have used a Blackberry.

        So how is it not a smart phone? It has SSH clients, VoIP clients, mapping, etc. so what's your point?

        All I can say in reply to your post is... huh?

        • by swb (14022)

          You're right, I've been around long enough to have used a Blackberry when it wasn't even a phone. It was revolutionary at the time, but it's clearly outived its usefulness or sense of innovation (which was always more about having portable email than the quality of the email).

          I don't quite understand why people consider it so great for email. I suppose the physical keyboard might be faster for typing, although even I'm amazed at how good I and others are on an on-screen keyboard. The interface seems les

    • I have used Blackberry, and no, it doesn't even rate being called a smartphone. The constant operating system upgrades always messed up your settings. The little keyboard was poor and always inserted double characters. The bizarre network setup routed everything through RIM.
      The Blackberry was a useful device that does one particular thing well at a particular point in history. But even a cheap Android phone is a better device. Time for RIM to go.
      • by MogNuts (97512)

        Apple and Android has constant upgrades. The issue is moot. Messed up settings? Never had a problem with either BB. As for keyboard, I think you're smoking something. ;-) The Bold was terrible--too small. But the prior one, and the new bold 9900 are bar none the best in existence. I can type as fast as a computer keyboard with those suckers.

    • I can only conclude that basically companies are just planting RIM hate and RIM apocalypse stories.

      Andriod, Apple, Microsoft and Linux fans are all going to throw you RIM fans a special concert performed on the world's tiniest violins. Consider it a "Welcome to our World" tribute concert.

    • I have a blackberry bold, from work. New 7.1 OS. Touchscreen, aluminum design obviously takes from iPhone. yay.

      But it sucks. Partly it's a chimera, gestures on the touchscreen battle with gestures from the keypad. The phone is awkwardly sized, trying to get a landscape wide screen with a need for a keypad.

      The OS is better, but still lacks basic things. They've tried hard to embed Twitter in the OS for example, but the browser is horrible. Being horrible is in fact an improvement - the old browser made me wa

    • by Karlt1 (231423)

      You do realize that the information about write downs, poor sales, and declining financials is coming from Rim, don't you?

  • Some of this is due to fashion and some of it to what has looked at times like a concerted negative PR attack from the competition. The Playbook on which I'm writing this is a convenient and useful tablet. RIM is now like Apple was at OS 9.2, except BB 7.1 isn't as bad as 9.2 was. Perhaps they will emulate Apple. Perhaps they will sink without trace.

    Still, old people like me who like real keyboards may hope to pick up a 9900 or a 9790 for silly money later this year. The 9790 is a small, convenient, well bu

    • by tlhIngan (30335)

      Some of this is due to fashion and some of it to what has looked at times like a concerted negative PR attack from the competition. The Playbook on which I'm writing this is a convenient and useful tablet. RIM is now like Apple was at OS 9.2, except BB 7.1 isn't as bad as 9.2 was. Perhaps they will emulate Apple. Perhaps they will sink without trace.
      Still, old people like me who like real keyboards may hope to pick up a 9900 or a 9790 for silly money later this year. The 9790 is a small, convenient, well bu

  • ... among the remaining executives at RIM anyway. Elsewhere, nobody cares what they are doing.

  • by Baloroth (2370816) on Tuesday May 29, 2012 @04:53PM (#40148115)

    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).

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Those are the quarterly numbers. In the year ending March 2012 they made $18B in revenue and $1.5B in earnings.

      • What makes this interesting is that one can so easily see the future of RIM so far out. All things considered they're doing well - they're still making a respectable profit and phone sales are near their peak. Yet at the same time they're almost entirely coasting by on momentum, as they haven't released a blockbuster product in quite some time. RIM may be fine now, but they have next to nothing to keep their customers over the long term, and that's their problem.
  • by compro01 (777531) on Tuesday May 29, 2012 @04:54PM (#40148123)

    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 [huffingtonpost.ca]

  • by Y-Crate (540566) on Tuesday May 29, 2012 @04:55PM (#40148145)

    NY Times [nytimes.com]

    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.

    • That's because they have no strategy other than "HOLY FUCK! Look at all those Android and iOS smart devices! What are we gonna do? We'd better just start flinging shit at the wall. Some of it has got to stick!"

    • by PCM2 (4486) on Tuesday May 29, 2012 @05:44PM (#40148759) Homepage

      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.

    • by Ecuador (740021)

      Off topic, but what is even more surprising (or outrageous depending on how you look at it) is that when the current Nokia CEO took over, he abandoned the (amazing as it turned out on the N9) MeeGo/Maemo for the Windows Phone giving as the reason the fact that their MeeGo dev pipeline was only good for 1 device per year (it was actually 2, but he he decided not to sell the N950).

  • Inventory (Score:4, Insightful)

    by PCM2 (4486) on Tuesday May 29, 2012 @04:57PM (#40148191) Homepage

    "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.

    • "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.

      It also helps if you can outsource this manufacturing to a place where you can treat the workers in a way that would be illegal in your primary market. Bonuses for the execs if you can reduce their wages enough to keep them below the poverty line. You can bet that part wasn't a surprise to Jobs, either.

      • It also helps if you can outsource this manufacturing to a place where you can treat the workers in a way that would be illegal in your primary market.

        RIM didn't seem to be helped by this.

        Oh wait, you meant APPLE. Except that Apple is the only company actually paying attention to worker conditions. Where are RIM's public investigations into worker treatment? Blackberrys could be built from the souls of 3rd world workers for all we know.

        In fact, that would explain the first Torch rather well. *shudder*.

    • According to this article [nytimes.com], they've released 37 models since 2007. Averaged out, that means they're sitting on just over $27 million inventory per model. The problem is, when you make 37 models, that turns into insanity.

      Someone elsewhere in the discussion pointed out that RIM is making the same mistake Apple made back in their dark days - releasing product after product and flooding the market. The first thing RIM needs to do is pick four or five phone models that they want to support and kill all others. Th

  • by organgtool (966989) on Tuesday May 29, 2012 @04:58PM (#40148201)

    RIM has said it aims to save $1 billion in operating costs this fiscal year by cutting its number of manufacturing sites

    On the plus side, at this rate it won't be long before RIM has no operating cost and is left with pure profit!

  • TERRIBLE writeup (Score:5, Interesting)

    by Scareduck (177470) on Tuesday May 29, 2012 @05:12PM (#40148389) Homepage Journal

    From TFA:

    The value of the company’s inventory climbed to $1.03 billion last quarter, up from $618 million a year earlier. Back in mid-2008, when the BlackBerry was still a hot seller and RIM’s stock traded at an all-time high of $147.55, the figure was less than $500 million.

    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.

    • Yes, but if RIM is having problems selling the inventory, they will have to lower prices. That means they will take a loss of some sort. While smartphones don't spoil like food, the rate of technology does make their models obsolete quickly. RIM can take the losses in small chunks or a large write-off. Some feel the one-time loss is easier.
    • by slew (2918)

      From TFA:

      The value of the company’s inventory climbed to $1.03 billion last quarter, up from $618 million a year earlier. Back in mid-2008, when the BlackBerry was still a hot seller and RIM’s stock traded at an all-time high of $147.55, the figure was less than $500 million.

      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.

      It is probably just a tacit assumption that they will play a common accounting trick. The game basically works like this, write 100% of the value of the inventory off at a loss and take the earnings hit all in 1 quarter. Now, if/when you eventually sell some of that inventory that you wrote off, the effective gross product margin looks great (because you wrote off all the loss in a previous quarter, the cost of goods is near zero) in the quarter you actually do sell them.

  • Unless somebody buys them first. No amount of reorganizing will help.

    • Companies don't go burst while profitable and with sustainable debits only. Before they go burst, one of those must change.

    • by Mashiki (184564)

      Doubtful, they made almost $4B last year with $200m in profit. That's not going bust, that's still making a profit with a poor P/E performance.

  • Their inventory consists mostly of blackberries.
  • Good things RIM have:
    Communication apps - BBM, email blah blah - people who have to get things done, like these (a lot).
    Keyboards - If I need to type many emails, and as much as I like swype, I want a physical keyboard.
    Company access - They were the mobile corporate tool, and as much as we hear about how android and iOS are making inroads into the enterprise market, these companies all still support BB and would (mainly) buy from them again. Actually I'd go further - the drive for the switch came from us

The superior man understands what is right; the inferior man understands what will sell. -- Confucius

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