The expense of inventory (Cost of goods sold) is not realized/booked until it is sold (unless it is written off as overstock/obsolete). So yes, you can ignore 17mil in inventory -- its all about their margins right now.. They can grow the top line like mad, but if they are not making anything on a phone, this stock is going to continue to drop. If they did reach better economies of scale this quarter and no negative surprises, I would expect a big bounce. Not holding my breath though.