RIM's hardware department could be losing money

posted by Victor H. / Apr 11, 2012, 7:00 AM

RIM's hardware department could be losing money

RIM is going down quickly and the latest financials made it obvious even for the most loyal ‘Berry fans. Adding salt to the wound, a bunch of top level executives started leaving the company, and to make matters even worse now, the Canadian company’s latest regulatory filing, reveals that RIM’s hardware department is probably losing money.

For RIM’s fiscal year ending February 2012 gross margins slumped to 20%, down from 36% on a GAAP basis. Jefferies analyst Peter Misek theorizes that after accounting for operating costs and inventory charges, this results in a loss.

According to the analyst, RIM’s hardware department is in the red: -8% on a GAAP basis, -3% on a non-GAAP basis, or -4% on an adjusted non-GAAP basis.

The last number should be closest to reality as it factors in the $752 million that RIM took in inventory write-offs.

RIM is probably eagerly counting the days until the BlackBerry 10 savior, the company’s last hope, comes, but that’s only expected to happen in late 2012. Tightening the belts and counting on the loyalty of institutions like the US government seems to be what has to somehow get the company through.

source: AllThingsD

Options

13 Comments

1. eaxvac

Posts: 328; Member since: Jan 15, 2012

Damn titanic just sink, quit creating dramas. Your phone sucks

posted on Apr 11, 2012, 7:16 AM 7

3. shadowcell

Posts: 300; Member since: Mar 28, 2012

For a company that was profitable in 2011 you sure have your doubts.

posted on Apr 11, 2012, 7:30 AM 3

11. christianqwerty

Posts: 467; Member since: May 05, 2011

Blackberry phones do not suck. You obviously havent used or. They may not have the newest technology or best software, but they are great phones. Email is unmatched, battery life is great, build quality is one of the bests.

posted on Apr 11, 2012, 10:53 AM 2

2. CharlieAtInfinity

Posts: 253; Member since: Apr 10, 2012

Thats what happens when you stop innovating and keep products overpriced!! for the price of BlackBerry Bold 9900 with a tiny screen + ageing processor you can get a galaxy S2 OR Xperia S + still have spare money!!

posted on Apr 11, 2012, 7:17 AM 8

4. JSern

Posts: 282; Member since: May 22, 2011

YOU DON'T SAY?

posted on Apr 11, 2012, 7:38 AM 0

5. Glim12808

Posts: 394; Member since: Oct 26, 2011

Since the future of RIM hinges on the success of BB10... what happens if that fails, are we then gonna see BB Androids and/or BB Windows Phones in the future?

posted on Apr 11, 2012, 7:46 AM 3

6. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

'RIM's hardware department losing money'??? Gee, ya' think!!!? 100 years from now we will commemorating the sinking of the S.S. R.I.M.

posted on Apr 11, 2012, 7:48 AM 3

7. jroc74

Posts: 6023; Member since: Dec 30, 2010

IF BB10 doesnt help RIM....it would be time for RIM to get bought by somebody or they partner with somebody. Or just focus on the enterprise, coporate markets. I tried a BB and Android at the same time. Web browsing experience went to Android. The app and prices went to Android. Even my text heavy kids mother dumped BB after it was stolen. A few months with my Droid X converted her.

posted on Apr 11, 2012, 7:54 AM 0

8. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

If BB10 handsets flop, the last trick they can pull out of the hat is to partner with handset manufacturers like HTC and Sammy (if the manufacturers would be interested, that is). The U.S. government is not interested in subsidizing RIM. There are other alternatives. Switching away from RIM would be expensive, but not as expensive as an on-going subsidy would be.

posted on Apr 11, 2012, 7:56 AM 2

9. shadowcell

I fear BlackBerry OS will suffer the same fate as Symbian OS and a hardware profit loss will just force RIM to seek 3rd party manufacturers to satisfy their orders. What I foresee in the near future is a huge restructuring of the company and possibly focusing their aim on communication solutions for large companies and governments.

posted on Apr 11, 2012, 8:22 AM 0

10. niteryda8

Posts: 19; Member since: Jan 10, 2012

I like how RIM is really throwing all wishes and prayers behind a updated OS that particularly won't get much more attention than they have now, because they have failed in hardware department with these plastic cheap azz phones that really don't feel all that comfortable in the hand. No company wants to buy RIM even if it came to that because their losing so much in market shares, and fan base faster than Pamela Anderson loses her panties around rockstars. They are going to be worse off than Palm if they don't start getting on board with some other OSes to compliment their new OS and hardware.

posted on Apr 11, 2012, 8:34 AM 0

12. downphoenix

Posts: 3165; Member since: Jun 19, 2010

Thsi is mainly due to the Playbook, also those costs may include R&D for hardware, RIM has had one of the biggest R&D budgets for mobile phone manufacturers in 2011. It doesnt look good for them, but when you compare them to Nokia, Nokia's stock has dropped more dramatically in the past year than RIMs, they have sold about 1/4th of the Lumias in Q1 that RIM has sold of BB devices (Despite BB being a dead platform and WP7 being new and hip and cutting edge per the various cell phone sites), and they are certainly in a better position than Nokia is at this particular juncture.

posted on Apr 11, 2012, 11:23 AM 0

13. bragzter

Posts: 53; Member since: Feb 21, 2012

Question is why is RIM taking so long to release their BB10 device. They should be working round the clock to have this thing out by summer and not fall when new devices running Windows Phone 8, Android and ofcourse the iPhone5 are all released