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!!!!
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.
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.
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.
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.
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.
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.
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.
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.
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.
As Winston Churchill once said. Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning of RIM's slow but sure demise. "
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.
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.
Comments
Quote:
Originally Posted by Quadra 610
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!!!!
Quote:
Originally Posted by Macky the Macky
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
Quote:
Originally Posted by SpamSandwich
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??
Quote:
Originally Posted by Apfeltosh
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.
Quote:
Originally Posted by Constable Odo
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.
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.
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.
Quote:
Originally Posted by melgross
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
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.
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.
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.
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.
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.
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.
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.
RIM your in denial, remember what happen to the storm? What goes around comes around.
As Winston Churchill once said. Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning of RIM's slow but sure demise. "
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.
When will RIM sell all their phones at discount prices just like HP sold their tablets?
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