Analyst Suggests RIM May Be Losing Money on Hardware Sales

By

Things just keep getting worse for Canadian telecommunications company Research In Motion, as Jefferies analyst Peter Misek has concluded in a new research report that the company that created BlackBerry is now losing money on hardware sales. Misek's conclusion comes after reviewing RIM's March 3rd 40-F filing with the SEC, which is more or less the equivalent of the 10-K filed in the U.S.

It seems that RIM's February 2012 fiscal year included hardware gross margins falling to 20 percent from 36 percent on the basis of Generally Accepted Accounting Principles (GAAP). Rim's non-GAAP gross margin for the fiscal year was 25 percent.

When factoring in operating expenses based on revenue, it would appear that GAAP hardware operating margins dropped to negative eight percent for fiscal year 2012 from a reported 15 percent in 2012. Operating margins for the year were three percent on a non-GAAP basis, or negative four percent after including inventory charges but excluding restructuring costs. It is expected that RIM will post another write-off in the May quarter.

The bad news just keeps piling up for RIM. BlackBerry's market share has been dropping steadily for the last two years as Apple's iPhone and a slew of popular Android devices asserted market dominance. Going into 2012, the iPhone alone was out shipping all BlackBerry devices 2.85 million to 2.08 million — a stark contrast to the iPhone's debut when BlackBerry devices outsold Apple's smartphone by about five to one, according to IDC and Bloomberg.

RIM's attempt to enter the tablet market with the BlackBerry PlayBook, too, was a failure as very few devices were sold last year. Again it was an Apple product, the popular iPad, which stopped the PlayBook from gaining any real hold in the market, also possibly undercut by the massive price drop of HP's TouchPad due to its being discontinued.






Edited by Jennifer Russell

TechZone360 Contributing Writer

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More