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BlackBerry Limited Message Board

  • smellyfox1 smellyfox1 Nov 23, 2011 12:10 PM Flag

    RIM to take huge charge on Playbook

    RIM shipped a total of 700,000 units of Playbooks in the past 2 quarters. Approximately another 100 - 200k shipped in the current quarter. The retail price is has been marked down by $300 each retroactively. Since most of the units are still sitting in the channel, RIM will have to take a charge of around $250 million just to compensate the retailers.

    There is also at least $500 million charge that RIM must take related to supplier commitments and other obligations given the much lower order volume than previously agreed to. RIM will have to bite the bullet at some point and write off this $500+ million when it finally decides to face the truth. Else it will be stuck with losing even more in unwanted inventory.

    So all together I expect RIM to lose $750+ million on the Playbook debacle. This entire amount could be charged to this current quarter when RIM announces earnings in Dec, or it could be spread out over next couple quarters. Either way... it is a huge amount for a company with just $1 billion in cash left.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Funny thing about "one time charge" is that they are almost never one time.

    • the stock's down 30% in a month. thanks for your concern.

    • Be careful maintaining a short position based on a one-time charge.

    • clearly you didn't see the parody mock of "by the way".

      and since you dodged facts as usual, i'll say it again: AAPL sold five times as many units on its opening weekend than RIM sold playbooks over an entire quarter.

    • Even worse than the inevitable write off and big charge is the fact that QNX development is progressing poorly. It's not just about the Playbook but also the phone which is the main revenue source.

      The entire project now runs the risk of being derailed by further delays and quality issues. When it eventually gets released, if it gets the same reception as the Playbook.. then imagine how big of a charge RIM will end up taking?

      Cash would dry up in a couple quarters, with more layoffs and restructuring. Then RIM may no longer remain a independent company and bankruptcy becomes a possibility. I think all of this will happen before next Thanksgiving.

    • Never own a IPHONE in my entire life and don't even miss it at all. The name brand phone buying fever will die with Jobs. Nokia, Blackberry, Palm, Motorolla phones are just as well and inexpensive. I bet you many out there who own phones don't really watch movie, playing video games so much with their phones. You buy IPHONE because it is fashion and give you a chance to tell others you have one, too. Other than that, there isn't really that great of a huge difference than the other phones. I have ran over 25 years of business and I don't have IPHONE and I never miss it.

    • Bump!!

    • Will this charge cause a big drop in RIM's already low cash balance?

    • I agree about the charge on units shipped, but not about the charge on obligations to suppliers. That one would only occur if RIMM stops making and selling playbooks (and I don't think they will do that).

      • 3 Replies to blackoutbuzz
      • The Playbook will be no more by the end of 2012. Even idiots like the co-CEO's will concede this if the numbers remain anemic.

        RIM halted production on the Playbook 2 in June and subsequently layed off 200 employees.

        They should've never entered the space..

      • When Playbook is selling so poorly that RIM reduce the production/shipment rate which was planned for several million units each quarter to just several hundred thousand.... there will be a charge. It just a matter of when RIM will face up to it and take that charge.

        HP decided to cut its loses and take it in the chin to get it over with in 2 quarters. RIM is still in denial. Whether Playbook is still in production or not makes no difference. The volume committed has not and will not be fulfilled. Base on your flawed logic... then RIM can just keep asking the supplier to provide components and make 1 Playbook a quarter. So technically it hasn't stopped making and selling Playbooks... so no charge? LOL Tricks are for kids. Time to grow up and face the music.


        The fact is these Playbooks are selling so poorly that the original MSRP of $499 is now $199. This is basically liquidation price. Why do you think RIM is liquidating channel inventory when the shipment volume that was estimated to be 2-3 million a quarter (go back and read various articles and posts from early 2011) is now only shipping at rate of 100-200k a quarter?

        The wheel has fallen off the wagon and some of you are still asleep at the wheel.

      • You can only chalk this error up to bad management. It's pretty hilarious that all these company like HP, RIMM, MSFT, AMZN chasing their tails trying to compete in an area that they never had a chance to win in.

        Collectively they have been burned by trying to catch up, instead of inovating, or just simply admitting that they don't stand a chance in this arena.

        If I was on the board of any of these companies, I would've have told them not to even attempt to make a tablet.

        I have to say AMZN is leading in competing with the Ipad, but in the end, they will lose, and lose badly. The Kindle fire is not making AMZN any money, even if it sells well.

        In the end, does anybody acutally believe that an online retailer will have anything to say in the tablet area? Not a chance.

    • You are correct.

      Moreover, they have not taken any charges for the 2000 employees that they laid-off beginning last quarter.

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