Things keep getting worse for BlackBerry. A report in The Globe And Mail says that it may have to do a massive write down of inventory due to poor sales:
Released this year, the company’s new BlackBerry 10 smartphones were well received by critics but have sold poorly in many of BlackBerry’s key markets – most notably, the United States. As a result, many devices the company has shipped to retail channels remain unsold.
The reason is simple:
The company is now in the midst of a strategic review that could lead to a sale of all or parts of the business. Analysts, however, assign little value to BlackBerry’s handset business, and some expect the company will need to book a substantial writedown sooner or later as it takes the difficult steps to make itself a more appealing acquisition target.
The handset business is likely to be of little use to potential buyers for the company, analysts say.
As such, a move by BlackBerry CEO Thorsten Heins to write down inventory and slash staff could help streamline the company before any potential buyer made a formal offer.
“Apple and Microsoft don’t need the handsets, so you would have to shut that down,” said BGC Financial analyst Colin Gillis. “It looks like Thorsten is going to do a lot of that work himself.”
Mr. Gillis said BlackBerry may go ahead with writedowns when it reveals its quarterly earnings next week, or could wait another quarter so as to give itself more time to market them and try to gain traction from its newest phones – including the new flagship phone, the Z30, announced this week.
This could be the beginning of a process that would lead to a sale, a shrinking of the business, or extinction. Plus, this news won’t help BlackBerry sell phones. Something it desperately needs to do right now. It’s not certain which way it will go, but chances are it won’t end well for BlackBerry.
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This entry was posted on September 20, 2013 at 7:59 am and is filed under Commentary with tags BlackBerry. You can follow any responses to this entry through the RSS 2.0 feed.
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BlackBerry To Write Down Inventory: Report
Things keep getting worse for BlackBerry. A report in The Globe And Mail says that it may have to do a massive write down of inventory due to poor sales:
Released this year, the company’s new BlackBerry 10 smartphones were well received by critics but have sold poorly in many of BlackBerry’s key markets – most notably, the United States. As a result, many devices the company has shipped to retail channels remain unsold.
The reason is simple:
The company is now in the midst of a strategic review that could lead to a sale of all or parts of the business. Analysts, however, assign little value to BlackBerry’s handset business, and some expect the company will need to book a substantial writedown sooner or later as it takes the difficult steps to make itself a more appealing acquisition target.
The handset business is likely to be of little use to potential buyers for the company, analysts say.
As such, a move by BlackBerry CEO Thorsten Heins to write down inventory and slash staff could help streamline the company before any potential buyer made a formal offer.
“Apple and Microsoft don’t need the handsets, so you would have to shut that down,” said BGC Financial analyst Colin Gillis. “It looks like Thorsten is going to do a lot of that work himself.”
Mr. Gillis said BlackBerry may go ahead with writedowns when it reveals its quarterly earnings next week, or could wait another quarter so as to give itself more time to market them and try to gain traction from its newest phones – including the new flagship phone, the Z30, announced this week.
This could be the beginning of a process that would lead to a sale, a shrinking of the business, or extinction. Plus, this news won’t help BlackBerry sell phones. Something it desperately needs to do right now. It’s not certain which way it will go, but chances are it won’t end well for BlackBerry.
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This entry was posted on September 20, 2013 at 7:59 am and is filed under Commentary with tags BlackBerry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.