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RIM's unsold inventory of BlackBerrys, PlayBooks swells to $1B value - Page 2

post #41 of 67
Quote:
Originally Posted by Quadra 610 View Post

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?

There's a ship laying on its side in the Mediterranean, and the world's luckiest captain, who managed to fall into a lifeboat, is out of work. HE can guide this sinking wreck to shallow water near shore... Francesco Schettino is RIM's man who's time has come!!!!

"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 #42 of 67
Quote:
Originally Posted by Macky the Macky View Post

 

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

And I think that strategy may very well work.  Anybody that hasn't already woken up to the fact that RIM is toast can sleep through an earthquake.

 

Thompson

post #43 of 67
Quote:
Originally Posted by SpamSandwich View Post

 

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

If you dump crap in the ocean and call it a fish sanctuary it ceases to be an environmental hazard. Didn't you know that??

"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 #44 of 67
Quote:
Originally Posted by Apfeltosh View Post
Only a complete moron would cheer that all of Apple's competitors go bankrupt. 

 

Competitor? Microsoft has done a better job competing than these clowns.

 

Quote:
You think Apple is ripping you off blind now… 

 

Nope.

 

Quote:
…imagine the prices on their products with no competition.

 

All the legal monopolies seem to be doing all right with prices.

 

Quote:
Keep cheering for the demise of Samsung, RIM, Google and others and you will have to apply for a new mortgage... for iPhone 6.

 

Except that's out in October.

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 #45 of 67
Quote:
Originally Posted by Constable Odo View Post
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

Yeah as dumb as this situation is, it still very sad.  I hope Blackberry can make something happen after the layoffs.  IBM laid off 60,000 workers in July of 1993 and it was widely believed they were a goner.  They pulled it out and are a healthy company today.

post #46 of 67
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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.  

Give me a break! So they say sales in Nigeria and Indonesia are doing well. Wow! That's certainly a measure of success. Let's see, smartphone penetration of all cellphone users in Nigeria is 5%, and RIM has half of that. So how many phones a year are sold in Nigeria? There are over 150 million people there. But a third, almost, are children. How many of the 100 million can actually afford to buy a phone, remembering that phones there aren't subsidized? What do we get, maybe 5 million phones sold a year? 10 million (doubtfully)?

5% of 10 million is 500,000. RIM is said by some to have half of that. So they sold 250,000 phones there last year. Well, that's not much.

They are in the red, as they lost money last quarter, and are expected to continue losing money for the foreseeable future. They make almost all their profits in developed countries, and most of that in N America.

RIM is running out of time.
post #47 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 of today, their P/E is 2. They're down almost 8% after hours after the announcement of hiring the banks to look into their business. Their price is now so low that it's at .56 book!

I don't see anythi g they can do other than to sell themselves. And that's what it looks like their preparing to do. along with the second layoff in 12 months, it's being said that they want to get down to 10,000 employees by early 2013. The only reason to do that is to make themselves look good to a possible suitor.
post #48 of 67
Quote:
Originally Posted by melgross View Post
I don't see anythi g they can do other than to sell themselves.

 

Looks like that's exactly what's bound to happen after this fiasco:

 

http://forums.appleinsider.com/t/150353/rim-chief-forecasts-grim-q1-performance-after-shares-halted

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 #49 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.

If it can't be sold at break even, it must be written down. And break even includes cost of sales and warrantees. If they take another round of write downs they will be in big trouble. Sales this quarter are predicted to be under $4 billion.
post #50 of 67
Quote:
Originally Posted by Quadra 610 View Post

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?

I wish people would stop razzing on Amelio. He did a pretty good job, all things considered. The guy to blame was his predecessor, Michael Spindler. He was the guy who screwed up Apple. By the time Amelio got there the company was a mess. He was smart enough to understand that Copeland needed to be axed, and that they had to go outside to get their new OS. That was probably one of the most important decisions ever made at Apple, and he made the right one.
post #51 of 67

And their ex CEO did not even end up with a second rate hockey team after spending all the good time, effort and money.  Dumb.

post #52 of 67
Quote:
Originally Posted by Suddenly Newton View Post

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.

That seems obvious, doesn't it? But they may have contracts that would cost too much to break. Product prices to a customer are based on numbers manufactured. Same thing with parts. It might have cost more to cancel orders than to have them finished. This billion is probably about a third that in costs to RIM. But if they can write off the full cost, then that's an advantage.
post #53 of 67
Quote:
Originally Posted by SpamSandwich View Post

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

That was what they did back then. There were spots where they would sink ships, and drop off all kinds of junk in some artificial reef building. They haven't done that for a while.
post #54 of 67
Quote:
Originally Posted by Tallest Skil View Post

Looks like that's exactly what's bound to happen after this fiasco:

http://forums.appleinsider.com/t/150353/rim-chief-forecasts-grim-q1-performance-after-shares-halted

Yeah.

As for their saying how successful their pony show was this year, well, it was really a bust.

It was the first time that BB10 was shown. The hardware wasn't fully operational. The OS wasn't really operational at all, just some fixed features that were said to seem to have been hard coded in. I remember late last year it think, when at the financial conference when they were asked if BB10 was running behind schedule, after they announced that one phone would be out late 2012, rather than three phones early in the year, that they said that no, it wasn't, but they were waiting for a part for the phone.

A part for the phone? That sounded, well, phoney.

With what was seen a month ago, it now looks that the OS might not even be in alpha. I doubt it will be out by the holiday shopping season.
post #55 of 67
Quote:
Originally Posted by melgross View Post

That seems obvious, doesn't it? But they may have contracts that would cost too much to break. Product prices to a customer are based on numbers manufactured. Same thing with parts. It might have cost more to cancel orders than to have them finished. This billion is probably about a third that in costs to RIM. But if they can write off the full cost, then that's an advantage.

I can't imagine anyone tracking inventory that way.

Most commonly (by far), one tracks inventory by the total cost of production. This is almost always the case when it is a newly manufactured product.

In a few cases, production cost can be adjusted based on raw material costs. For example, a jewelry store could adjust inventory value up or down based on how much gold or platinum is in the inventoried jewelry. That adds a lot of complexity and isn't done very often. One of the few cases where one would do it is if they were trying to decide how much insurance to carry or if they need a loan backed by inventory value.

In very unusual cases, inventory can be written up or down if its market value has changed significantly due to unforeseen circumstances. But even then, it would be nearly unheard of to value it at the customer's price.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #56 of 67

RIM your in denial, remember what happen to the storm? What goes around comes around.

post #57 of 67
Quote:
Originally Posted by jragosta View Post

I can't imagine anyone tracking inventory that way.
Most commonly (by far), one tracks inventory by the total cost of production. This is almost always the case when it is a newly manufactured product.
In a few cases, production cost can be adjusted based on raw material costs. For example, a jewelry store could adjust inventory value up or down based on how much gold or platinum is in the inventoried jewelry. That adds a lot of complexity and isn't done very often. One of the few cases where one would do it is if they were trying to decide how much insurance to carry or if they need a loan backed by inventory value.
In very unusual cases, inventory can be written up or down if its market value has changed significantly due to unforeseen circumstances. But even then, it would be nearly unheard of to value it at the customer's price.

Total cost of production, normally. But from how they wrote down previous inventory, and the numbers of product written down, it comes much closer to expected selling price from RIM. Not list, but RIM's selli g price.
post #58 of 67

When will RIM sell all their phones at discount prices just like HP sold their tablets?

post #59 of 67

Iit's called creative destruction ... look it up on wikipedia.  In a fast moving space like smart phones, you have a series of winners, each with market power for a limited time, each that get plowed under by the next new thing.  The key thing is that the business model that works for each stage is usually different so that the companies that command one era seldom command the next era.  

 

Look at how different each of these are:

 

Palm/Handspring =>  RIMM => Apple (or Samsung/Google)

 

This is happening to WinTel now.  They were the behemoths of the 90's and 00's even but the client market is moving to wireless thin devices and the heavy lifting is moving to servers.  The heavy desktop apps like spreadsheets and graphics will be where people will still need full PCs.  An explosion of diversity compared to what has been.

 

I'm over at http://investordiscussionboard.com if you want to discuss financials.

 

TabletCoder

post #60 of 67

A billion dollars worth of RIM stock?

 

I'd buy that for a dollar!!!

 

jpg

post #61 of 67

I will not make light of someone else's misfortune, even though I started the very first Mac user group way back when and then continued to buy apple products through all the good and bad years.  I heard all the verbal abuse all along the way.

 

The fault for this failure to perform and lack of leadership at RIM belongs to RIM's senior management, not the rank and file employees who will get hurt the most.   Every senior exec in the world should be asking themselves one question weekly -- what have I done to create a new product/solution so wonderful that it will cannibalize and eventually replace my existing products?   Boards of directors should be held accountable if they and senior management can not answer that question.

post #62 of 67
Quote:
Originally Posted by SailorPaul View Post

I will not make light of someone else's misfortune, even though I started the very first Mac user group way back when and then continued to buy apple products through all the good and bad years.  I heard all the verbal abuse all along the way.

The fault for this failure to perform and lack of leadership at RIM belongs to RIM's senior management, not the rank and file employees who will get hurt the most.   Every senior exec in the world should be asking themselves one question weekly -- what have I done to create a new product/solution so wonderful that it will cannibalize and eventually replace my existing products?   Boards of directors should be held accountable if they and senior management can not answer that question.

Unfortunately, you know it doesn't work that way. While "C" level executives do get fired, if a company is screwed because of their decisions, or that of others, the company is still screwed. The company will falter and maybe fail. If that happens, people get fired. There's no other way.
post #63 of 67
Quote:
Originally Posted by Hyram Gestan View Post

I will never forgive RIM because they ridiculed the iPhone when it first came out.  I hope that they die.

Did you design the iPhone? No, so why do you care? You are a truly sad fanboi. Sad.

post #64 of 67

Trolls trolling trolls… lol.gif

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #65 of 67
Quote:
Originally Posted by Apfeltosh View Post

Did you design the iPhone? No, so why do you care? You are a truly sad fanboi. Sad.

I don't forgive the RIM co-ceo's for their complete and utter stupidity and for their board to keep them in place as long as they did, and for both Wall Street and Washington DC for financially supporting them when it was clear they were just hanging onto their already old technology.

 

And today, there are still companies, governments and financial institutions who just can't say no to using a BB, even in the face of better alternatives.  It's like what I hear from people who are dyed in the wool Chevrolet fans.  They bought the crap of a Cavalier for years, not because it was the best car out there, but because it was a Chevy.

post #66 of 67
Quote:
Originally Posted by haar View Post

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.

 

Actually, anyone getting free RIM stuff probably would have higher costs dealing with these obsolete products. Not to mention, the morale hit... "Geez, we're so impoverished they won't even give us free Android stuff. Wow, we really suck more than we thought we did."

 

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?

 

There's no turnaround, as I mentioned in another thread, it's all "containment" now like in those post-apocalyptic movies. Go room-by-room purging everything with flame then retreat to a safe distance as the nuke is dropped.

 

Quote:
Originally Posted by melgross View Post


Give me a break! So they say sales in Nigeria and Indonesia are doing well. Wow! That's certainly a measure of success. Let's see, smartphone penetration of all cellphone users in Nigeria is 5%, and RIM has half of that. So how many phones a year are sold in Nigeria? There are over 150 million people there. But a third, almost, are children. How many of the 100 million can actually afford to buy a phone, remembering that phones there aren't subsidized? What do we get, maybe 5 million phones sold a year? 10 million (doubtfully)?
5% of 10 million is 500,000. RIM is said by some to have half of that. So they sold 250,000 phones there last year. Well, that's not much.
They are in the red, as they lost money last quarter, and are expected to continue losing money for the foreseeable future. They make almost all their profits in developed countries, and most of that in N America.
RIM is running out of time.

 

RIM has some momentum in developing countries because it's the most affordable smartphone outside of iPhone (which is premium) and Samsung (which is now relatively premium and which has surpassed Blackberry). 

 

The concern is that if sales are doing well in developing countries... Why do they have so much inventory? Something is up. When an infection spreads through the company, there's nothing left to do but take it out the back and shoot it. 

 

I feel sorry for them on one level, but in my 10 years of work experience, I've seen companies and people of all trades do this to themselves. Karma is a ruthless but just bitch.

post #67 of 67
Quote:
Originally Posted by melgross View Post

Unfortunately, you know it doesn't work that way. While "C" level executives do get fired, if a company is screwed because of their decisions, or that of others, the company is still screwed. The company will falter and maybe fail. If that happens, people get fired. There's no other way.

 

It's the old way of business, and indeed, they reap what they sow. Boards and C-Level can prance from failure to failure, that's their karma to face.

 

But for companies, it's pretty obvious nowadays how to succeed. That is, use common sense, listen to what customers want, and don't be arrogant pricks.

 

Any company that doesn't do that, is simply doomed this century. They can be propped up for years or decades, but eventually, the walls will cave in.

 

I'm a strong believer in small business enterprise, though you can get the other extreme - a mom and pop show where they also have no idea what they are doing.

 

In the end, it's all about people. The right people can make anything happen, regardless of their "training", "education" or "skills" starting point.

 

Steve Jobs was a great visionary, but he was able to corral a team of people the world has never seen since perhaps the Renaissance.

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