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RIM's unsold inventory of BlackBerrys, PlayBooks swells to $1B value

post #1 of 67
Thread Starter 
Last quarter, Research in Motion's backlog of unsold BlackBerry handsets and PlayBook tablets grew to more than $1 billion in value, underscoring the company's struggles to sell its products.

RIM's total inventory last quarter grew to $1.03 billion, up from $618 million a year earlier, as noted by Bloomberg on Tuesday. RIM's inventory is more than twice what it was in 2008, when the company was still a major threat to Apple's iOS mobile platform, as well as Google's Android.

The inventory total held by RIM doesn't include smartphones and tablets that are also being held unsold by retailers and carriers around the world. It's expected that RIM will be forced to write down its $1 billion stockpile of unsold devices.

Last December, RIM was already forced to take a $485 million charge on unsold PlayBook touchscreen tablets. The company also initiated a fire sale of the device for as little as $199 in an effort to spur sales.

Tuesday's report included comment from analyst Neeraj Monga of Toronto-based Veritas Investment Research, who said RIM's inventory levels are not dropping despite the number of writedowns from the company. "Clearly this stuff isn't selling," he said.

RIM


The bad news continues to mount for RIM, as the company announced on Monday that it will ax nearly 40 percent of its workforce in the coming months. In addition, RIM Chief Legal Officer Karima Bawa announced this week that she will resign from the company.

RIM's co-founders Mike Lazaridis and Jim Balsillie stepped down from their co-CEO positions in January and were replaced by former Chief Operating Officer Thorsten Heins. The new CEO initially said he did not foresee a major shakeup in the company's near future.

RIM has placed its hopes on the company's forthcoming BlackBerry 10 operating system, which is scheduled to launch later this year. Earlier this month, RIM provided developers with a pre-release prototype BlackBerry 10 device to write software for the upcoming platform.
post #2 of 67

Pull an Atari and bury them in the desert.

 

Or tear them down and sell the rare elements, I guess.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #3 of 67
Beleagured?

Hello, RIM? I got ET on the line from the planet Atari. Something about a landfill.
post #4 of 67

2012 will be RIM's last year. Time to pack your bags.

Apple had me at scrolling
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Apple had me at scrolling
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post #5 of 67

$99 

bb
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bb
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post #6 of 67
Quote:
Originally Posted by Tallest Skil View Post

Pull an Atari and bury them in the desert.

 

Or tear them down and sell the rare elements, I guess.

FYI, Apple did that too. Somewhere in Utah, there are a bunch of Lisa systems buried.

post #7 of 67
Quote:
Originally Posted by Gustav View Post
FYI, Apple did that too. Somewhere in Utah, there are a bunch of Lisa systems buried.

 

Really? That's too vague, man; I need to know where to start digging!

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #8 of 67
Quote:
Originally Posted by bloggerblog View Post

$99 

$49.99 and not a penny more.  

post #9 of 67
All those years of people predicting the demise of Apple; all those years of wincing at the term "beleaguered" ; all those years of the tech media dismissing Apple as irrelevant; all those years of listening to guys like Ballmer denigrate Apple as a "rounding error".

So excuse us if we take some pleasure in seeing one of the darlings of the Enterprise, one of the tech media's favorites, circling the drain because they didn't see the iPhone coming and didn't know how to respond to it when it showed up on the market.

Nobody is laughing at Apple now are they. They are shaking in their boots, trying to find a spider hole to crawl into.
post #10 of 67
Quote:
Originally Posted by iVlad View Post

2012 will be RIM's last year. Time to pack your bags.

 

Not even close.  Their north american marketshare is dying, but their overseas market is growing.  They aren't in the red.  They are in trouble, but not as bad as the media makes it out to be.  

post #11 of 67

What a joke.

 

They already tried desperate and drastic firesales. What's next, get a free phone and also get $50?lol.gif

 

They can make it up in volume, just like Amazon.

 

There's always the bury it in the desert option, which a few people have already mentioned, if they can afford the concrete.lol.gif

post #12 of 67
RIM should donate all of the used playbooks, to the university of waterloo, laurier, toronto... heck all of the canadian universities... maybe then they may be useful. (or become useful)... because the canadian taxpayers are ultimately going to pay for this inventory, thus the effectively lower taxes caused by the inventory write-down.. IMO.
post #13 of 67
Quote:
Originally Posted by lkrupp View Post

All those years of people predicting the demise of Apple; all those years of wincing at the term "beleaguered" ; all those years of the tech media dismissing Apple as irrelevant; all those years of listening to guys like Ballmer denigrate Apple as a "rounding error".
So excuse us if we take some pleasure in seeing one of the darlings of the Enterprise, one of the tech media's favorites, circling the drain because they didn't see the iPhone coming and didn't know how to respond to it when it showed up on the market.
Nobody is laughing at Apple now are they. They are shaking in their boots, trying to find a spider hole to crawl into.

 

i think apple is an amazing company but i doubt that they'll be on top forever. so take all the pleasure you want in rim's demise, but don't be offended or surprised when others take pleasure at apple's misfortunes, whenever they might be.
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appleinsider's mike campbell, august 15, 2013
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post #14 of 67

Wake up, RIM, amateur hour is almost over. Zuckerberg will soon devour whatever's left of you and share the scraps with Ballmer and Co. 

post #15 of 67
I guess someone skipped the classes on manufacturing and inventory management to watch the movie Field of Dreams.
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #16 of 67
Quote:
Originally Posted by ghostface147 View Post

 

Not even close.  Their north american marketshare is dying, but their overseas market is growing.  They aren't in the red.  They are in trouble, but not as bad as the media makes it out to be.  

They have a major problem in that they can make BBs faster than they can sell them. They likely have their factory running as slow as they can; any slower and it can't be geared up for the BB10. This is why they have such a huge inventory. If they were selling like you say overseas, then why are the warehouses piling up with BBs and PBs??? 

 

Yes, they aren't in the red, but they are beginning to starve for cash. They are a huge company but even dumping 40% of their staff, is a short term solution. There are sales and marketing included in that bunch... talent that is needed to move the BB10 in a few months. That's assuming that the best talent isn't shopping for a new healthier horse to ride. RIM hasn't been a fun place to work even in the better times, I doubt that many employees have a strong sense of loyalty to RIM. Especially since the Upper level of management doesn't have a love affair with the company.

 

There's blood on the boardroom floor. The fat lady is running the scales and heading for the wings... 

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #17 of 67
Quote:
Originally Posted by Pooch View Post

i think apple is an amazing company but i doubt that they'll be on top forever. so take all the pleasure you want in rim's demise, but don't be offended or surprised when others take pleasure at apple's misfortunes, whenever they might be.

Feeling delight in someone else's misfortune is never a positive thing, but I can understand Apple users having it after decades of Apple hatred and intentional misinformation.

J.
post #18 of 67
Quote:
Originally Posted by lkrupp View Post
So excuse us if we take some pleasure in seeing one of the darlings of the Enterprise, one of the tech media's favorites, circling the drain because they didn't see the iPhone coming and didn't know how to respond to it when it showed up on the market.

It's a personal favorite for me. When RIM was at its peak, my daughter asked me to buy some of its stock and I refused, because I don't believe the physical keyboard can withstand the test of time. I believe the screen must be full size. Therefore, I believe a touch screen phone will overtake the smartphone market.

post #19 of 67
Too bad for RIM. A couple of years ago I had high hopes that they would provide the world with another viable mobile OS but unfortunately they screwed it up badly. The literally are caught in their own technology web and can't see a way out.
post #20 of 67

Dear RIM,

 

Thank you for pioneering wireless email in the enterprise.  We will take it from here...

 

Apple
 

post #21 of 67

RIM will not see continued growth overseas as both Apple and Android (manufacturers) extend their push into new markets.  They are also going to get hammered when they miss and push back the launch of their new OS and the reported new handsets into 2013.  At some point in the very near future, it won't make any sense for them to keep money pouring into new handsets and OS if they can't offer something, anything, that is different or better than what Apple and and Android crowd offer.

 

Perhaps they have something interesting up their sleeve, but I kind of doubt that is the case - especially given the news of the pending mass layoffs.  Heins obviously has no go-forward plan to turn the ship around and it seems like they're just trying to keep the boat afloat at this point.  I would bet a decent chunk of money that we will start to hear of their looking at opportunities to sell or license their patents - something they've held back on talking about up to this point.  I foresee things falling apart much more quickly than some people here.  RIM seems to be like the VHS tape manufacturer hoping that DVD's just won't catch-on.

post #22 of 67
For a market cap of less than $6B... a $1B write-down is pretty huge. Given their PE is around 5 (call it a forward PE of 10)... it would seem like it is time for a turn-around specialist to come in.

What could they do to become relevant again?
post #23 of 67
Quote:
Originally Posted by Pooch View Post

 

i think apple is an amazing company but i doubt that they'll be on top forever. so take all the pleasure you want in rim's demise, but don't be offended or surprised when others take pleasure at apple's misfortunes, whenever they might be.

"Forever" is a long time, and the "top" is a lonely place with steep sides. Nearly every large company struggled mightily to get going and many died during their first smack down after some initial success. It's in the learning to adjust to challenges that that makes the difference. The coco-CEOs held onto their power too long to give the company a chance to adjust. The company is in free-fall. The talented executives and engineers are headed for the doors. 

 

While the app designers have a pre-release product to play with, who wants to spend their time developing for a burning platform?

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #24 of 67

If the inventory is unsold, one can argue that the value is $0

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post #25 of 67

I'd buy a playbook or 5 for $50 each.  Photoframes and other neat things can be done with them.

post #26 of 67
Quote:
Originally Posted by jd_in_sb View Post

If the inventory is unsold, one can argue that the value is $0

Not necessarily.

1. One could value it at potential sales value. If a Playbook won't sell at $499, it may sell at $199. Or $99. So it still has value.

2. In some cases, inventory can be reworked or salved for material value.

3. Depending on the accounting system, it is common to value items at manufacturing cost - even if they can't be sold for that. If that's the case, it may ultimately be necessary to write it down, but if you think you can sell it - even if it takes a long time, you may not need to.
"I'm way over my head when it comes to technical issues like this"
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"I'm way over my head when it comes to technical issues like this"
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post #27 of 67

I remember when RIM was always offering Buy One, Get One.  Now they can offer Buy One, Get Ten.  All joking aside, I feel bad for the average workers who are going to suffer due to gross mismanagement by a couple of CEO's.  I guess two heads aren't always better than one.  I think the older BlackBerry smartphones have seen their day.  Not because they'd be useless smartphones, but I think consumers want the big displays and fast processors and all the rest of the bling that BlackBerries don't have.  I hope that RIM doesn't go out of business because it was a rather important company for Canada.

 

The main problem with RIM that I don't think it looked ahead very far and ignored what was happening around it.  They believed they could just keep pumping out the same type of smartphone for years with only minor improvements.  However the whole smartphone industry changed and they got left behind even if their products were satisfactory and did the job they were intended to do.  I do remember a short few years ago and the analysts were saying that RIM was going to be on top for years because they were so deep into the corporate structure and so many consumers were CrackBerry-addicted.  Where, oh where did the time go so fast and now RIM is struggling for survival.  The analysts don't know diddly.

post #28 of 67
Quote:
Originally Posted by aaarrrgggh View Post

For a market cap of less than $6B... a $1B write-down is pretty huge. Given their PE is around 5 (call it a forward PE of 10)... it would seem like it is time for a turn-around specialist to come in.
What could they do to become relevant again?

As noted too, the $1B does not include unsold inventory in their customer's hands.  Perhaps that number isn't as big as we think if the telco's minimized what they were holding given the slow sales, but it's probably quite significant and will further punish their stock when they have to start taking back old inventory.

 

What could they do to become relevant again?  I'm sure they're paying some very high-priced consultants to tell them exactly that - but the answer is they would need to innovate, which is a problem given where they are at now.  They need a good 2 years of time when the competition doesn't innovate to be able to get ahead - and the money to survive during this time.  Of course that won't happen.

post #29 of 67
  1. Pardon me for pointing out that RIM has nobody near the kind of person at the helm as Steve Jobs, not in vision, charisma or sheer determination to be successful. Good luck because that's what it will take for RIM to rebound.
post #30 of 67

Apple had Gil Amelio. Problem. 

 

Apple had Gil Amelio who thought it would be a great idea to acquire NeXT and bring back Jobs (of course, only after negotiations to acquire Be Inc. failed.) And Jobs wanted it. Much, much less of a problem. Apple always had that Steve Jobs connection.

 

Interesting that even when Apple had that turkey Amelio, there was *still* enough prescience within the company to recognize greatness and put it to work.

 

Who does RIM have?

post #31 of 67

Only a complete moron would cheer that all of Apple's competitors go bankrupt. You think Apple is ripping you off blind now, imagine the prices on their products with no competition. And if you are thinking that Apple is invulnerable, you only have to look at Blackberry. Who will be Apple's nemesis? Google? Samsung? Google + Samsung? Someone else? I think Apple's biggest problem is no more Steve Jobs. His absence will definitely be felt in the coming year. The products that will roll out this year have Jobs stamped all over it as they were already in the R&D process with his approval before he passed away. Keep cheering for the demise of Samsung, RIM, Google and others and you will have to apply for a new mortgage... for iPhone 6.

post #32 of 67
Quote:
Originally Posted by ghostface147 View Post

 

Not even close.  Their north american marketshare is dying, but their overseas market is growing.  They aren't in the red.  They are in trouble, but not as bad as the media makes it out to be.  

Well the claim that RIM isn't in the red lasted less than a day.  As of this afternoon, RIM pre-warned that they would be reporting an operating loss this quarter.  RIM is in deep, deep, trouble.

 

Thompson

post #33 of 67
Shouldn't they have reduced production when inventory started to pile up? Or were they thinking wishfully that demand would increase "any day now"? You'd think they could have avoided this one.

"Apple should pull the plug on the iPhone."

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"Apple should pull the plug on the iPhone."

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post #34 of 67

Per the headline, "...unsold BlackBerry handsets and PlayBook tablets grew to more than $1 billion in value..."

 

Um... if no one is willing to buy it, the value should be roughly nothing. Zero.

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Proud AAPL stock owner.

 

GOA

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post #35 of 67
Quote:
Originally Posted by jragosta View Post


Not necessarily.
1. One could value it at potential sales value. If a Playbook won't sell at $499, it may sell at $199. Or $99. So it still has value.
2. In some cases, inventory can be reworked or salved for material value.
3. Depending on the accounting system, it is common to value items at manufacturing cost - even if they can't be sold for that. If that's the case, it may ultimately be necessary to write it down, but if you think you can sell it - even if it takes a long time, you may not need to.

Reworking is unbelievably expensive and at best you have a product you sell as reconditioned. As for option three, time is not on RIM's side here. Keep in mind that inventory needs to be stored in bonded warehouses with a monthly cost per square foot fixed expenses. Then there's the staff to manage the inventory and the shipping staff to send it out the door. So, storing the product for any length of time raises the investment in the goods. It becomes a liability instead of an asset.

 

A billion dollars in finished goods is hardly an asset when your pipelines are full and narrow. Meanwhile, it all represents the past and not the future direction of the company. If it's disposed of wrongly, it will depreciate the value of the new product in the public's eye. At $50 estimated wholesale value each, a billion dollars represents 20 million devices in stock.

 

Facebook has the only immature CEO stupid enough to buy this barely floating piece of crap.

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #36 of 67
Quote:
Originally Posted by thompr View Post

Well the claim that RIM isn't in the red lasted less than a day.  As of this afternoon, RIM pre-warned that they would be reporting an operating loss this quarter.  RIM is in deep, deep, trouble.

 

 

Maybe RIM's management thinks that by dribbling out the bad news it won't "Wake Up" the stock holders.

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #37 of 67
Quote:
Originally Posted by jnjnjn View Post

Feeling delight in someone else's misfortune is never a positive thing, but I can understand Apple users having it after decades of Apple hatred and intentional misinformation.
J.

How would feeling bad for RIM rectify their inventory problem?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #38 of 67
Quote:
Originally Posted by Tallest Skil View Post

Really? That's too vague, man; I need to know where to start digging!
Micheal Spindler, the man who almost single handily destroyed Apple in late 1995 did that with almost a million Macs in 1996. Schools and libraries were begging for them, but he buried some and dumped some into the ocean.
post #39 of 67
Quote:
Originally Posted by Apfeltosh View Post

Only a complete moron would cheer that all of Apple's competitors go bankrupt. You think Apple is ripping you off blind now, imagine the prices on their products with no competition. And if you are thinking that Apple is invulnerable, you only have to look at Blackberry. Who will be Apple's nemesis? Google? Samsung? Google + Samsung? Someone else? I think Apple's biggest problem is no more Steve Jobs. His absence will definitely be felt in the coming year. The products that will roll out this year have Jobs stamped all over it as they were already in the R&D process with his approval before he passed away. Keep cheering for the demise of Samsung, RIM, Google and others and you will have to apply for a new mortgage... for iPhone 6.

 

I micturate upon such drivel as you write. The ghost of Steve Jobs will haunt all that cross his company. Legions of fan bois are restless in their graves. The undead are on Apple's side. Baw.ha ha ha ha....

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #40 of 67
Quote:
Originally Posted by melgross View Post


Micheal Spindler, the man who almost single handily destroyed Apple in late 1995 did that with almost a million Macs in 1996. Schools and libraries were begging for them, but he buried some and dumped some into the ocean.

 

Dumped them in the ocean? That would be an illegal environmental hazard. Where did you get this from?

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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