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.
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?
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 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.
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.
[LIST=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. [*] [*] [/LIST]
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.
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.
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.
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.
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.
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.
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?
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.
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....
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?
Comments
What could they do to become relevant again?
Quote:
Originally Posted by Pooch
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?
If the inventory is unsold, one can argue that the value is $0
I'd buy a playbook or 5 for $50 each. Photoframes and other neat things can be done with them.
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 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.
Quote:
Originally Posted by aaarrrgggh
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.
[*] 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.
[*]
[*]
[/LIST]
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?
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.
Quote:
Originally Posted by ghostface147
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
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.
Quote:
Originally Posted by jragosta
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.
I will never forgive RIM because they ridiculed the iPhone when it first came out. I hope that they die.
Quote:
Originally Posted by thompr
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.
How would feeling bad for RIM rectify their inventory problem?
Quote:
Originally Posted by Apfeltosh
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....
Quote:
Originally Posted by melgross
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?