RIM is Losing Money on BlackBerry Hardware, Analyst Says

Posted by Knowlton Thomas

Research In Motion lost money on its BlackBerry smartphones and tablets in 2011, one analyst suggests. Peter Misek of investment banking firm Jefferies calculated that, after assigning operating costs and including inventory charges, the embattled RIM spent 4% more than it took in.

In an annual filing RIM posted online, gross margins on hardware items fell from 36% to just 20% in one year. But with the beleaguered Waterloo-based company no longer guiding investors with financial forecasts, it's difficult to confirm Peter's math.

What is known is that RIM has been selling its PlayBook for up to 60% off, a discount that we are aware isn't profitable: the company lost nearly $500 million in a single quarter pushing this loss-leader promotion last year.

When Peter spoke over the phone with Thomson Reuters, he stated that "it's not likely to get better anytime soon," suggesting that RIM will "have to keep cutting prices" in order to remain competitive for the foreseeable future. RIM's most recent quarterly earnings report revealed its first qaurterly loss in seven years.

Photo: Kasa De Kris

Company:
BlackBerry
Website:
http://www.blackberry.com
Location:
Waterloo, Ontario, Canada

Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry solution in 1999. Since then, BlackBerry products and services have continued to change the way millions of people around the world stay connected. With the launch of BlackBerry 10, we have re-designed, re-engineered and re-invented BlackBerry. Not only did we introduce a... more


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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys playing tennis or otherwise enjoying the outdoors. more



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