RIM’s stockpile of unsold BlackBerry phones and PlayBook tablets is growing as sales continue to struggle ahead of the fall 2012 release of BlackBerry 10. The total value of these devices sitting in RIM’s warehouses is over $1 billion, putting RIM in a tough spot when it comes to next quarter’s financials. The company has taken charges of $485 million and $267 million in December and March to write down the value of its PlayBook and BlackBerry inventories, and likely faces another significant write-down in June.
While we won’t likely see a full $1 billion write-down in June, we also don’t see that inventory moving anywhere fast. People have simply stopped buying RIM devices, either holding off until the BlackBerry 10 platform is released later this year, or abandoning the platform altogether. RIM’s market share was down to only 6.7% in Q1 2012, according to the latest data from IDC. BlackBerry’s current stash of PlayBook and BlackBerry 7 devices will likely sit in RIM’s warehouses for a long time, as RIM’s carriers and retail partners are also sitting on significant amounts of inventory.
In an effort to cut nearly $1 billion of costs at the ailing handset maker, RIM is cutting several manufacturing sites as well as 2,000 to 3,000 jobs, according to estimates from an analyst at Northern Securities Inc. in Toronto. Further job cuts are likely, according to a source for Business Week.