[princesultan]

Here is a simple example it costs $100 to build a z10, and they build 2,000,000 extra (inventory cost, $200M). They think they are going to sell them at $700 a piece, they get entered into the books as an asset of $1.4B.
Sales are slow, so they still have 200,000 of them, but they adjust there asset value to $200 each, for a $1B writedown.

Show me the loss. It isn't real. If they still sell those BlackBerry's at $200 a piece, they make $200M

It is the same as the playbook write down. It is a paper loss.

Posted via CB10

incorrect. inventory is carried at COST on their balance sheet, not at their estimated selling price. you can't just enter an asset on your books for whatever you think it's worth. the fact they they had to write down their inventory below COST suggests that these phones are practically worthless and will never even be sold.

so yes, it is a real loss. they built these phones which cost money, and now they're sitting on the shelves collecting dust and will probably never even be sold.

so you're right, the write down didn't even cost them a penny, it cost them 100000000000 pennies. they spent money to manufacture something that will never be sold.

[jh07]

Here is a simple example it costs $100 to build a z10, and they build 2,000,000 extra (inventory cost, $200M). They think they are going to sell them at $700 a piece, they get entered into the books as an asset of $1.4B.
Sales are slow, so they still have 200,000 of them, but they adjust there asset value to $200 each, for a $1B writedown.

Show me the loss. It isn't real. If they still sell those BlackBerry's at $200 a piece, they make $200M

It is the same as the playbook write down. It is a paper loss.

Posted via CB10

One problem is selling those leftover phones. It's going to be tough to convince people to come over to BlackBerry at this stage.

Posted via CB10

[incongruent]

Any thoughts in what will happen to the write down devices? 3 for 1 sale?

Posted via CB10

[Toodeurep]

incorrect. inventory is carried at COST on their balance sheet, not at their estimated selling price. you can't just enter an asset on your books for whatever you think it's worth. the fact they they had to write down their inventory below COST suggests that these phones are practically worthless and will never even be sold.

so yes, it is a real loss. they built these phones which cost money, and now they're sitting on the shelves collecting dust and will probably never even be sold.

so you're right, the write down didn't even cost them a penny, it cost them 100000000000 pennies. they spent money to manufacture something that will never be sold.

So $945,000,000 / $200 = 4,725,000

You think they had almost 5million Z10s on the shelves? The Playbook should have taught them better...

[jh07]

So $945,000,000 / $200 = 4,725,000

You think they had almost 5million Z10s on the shelves? The Playbook should have taught them better...

I hate what they did too the PlayBook, great device. I know wrong thread.

Posted via CB10

[FinancialP]

I would love to see a full audit, and estimations from Blackberry. Third and first party.

[timmy t]

This is how I understand it but I am not sure that I am correct.
They may have 5 million Z10s in inventory. They valued them at $400 each. Now, they are valuing them at $200 each. So they are now valuing them at $200X5,000,000 less.
If it cost them only $200 to make, then they do not actually lose much money if they sell them for $200.
They are losing the added value that they attributed to them.
Not sure if this is correct or the numbers are accurate but I hope this concept is correct.

[app_Developer]

This is how I understand it but I am not sure that I am correct.
They may have 5 million Z10s in inventory. They valued them at $400 each. Now, they are valuing them at $200 each. So they are now valuing them at $200X5,000,000 less.
If it cost them only $200 to make, then they do not actually lose much money if they sell them for $200.
They are losing the added value that they attributed to them.
Not sure if this is correct or the numbers are accurate but I hope this concept is correct.

Your concept is totally not correct. The value of inventory initially would have been their cost, not their expected sale value.

The correction is because their expected value is now below their cost. $1 billion below cost.

[timmy t]

Your concept is totally not correct. The value of inventory initially would have been their cost, not their expected sale value.

The correction is because their expected value is now below their cost. $1 billion below cost.

OK, so it cost them $240 to make each one and they now say they are worth $40.

[Wiki Cydia]

Chris Umis, article said that if you ignore the inventory write down they basically break even.

Posted via CB10

Good point. You know, if I just ignore all the questions I missed on the SAT, I "basically" got a perfect score.

In all seriousness, the problem with this write-down isn't just the sheer dollar value; it's also the confirmation that BBRY apparently has lost the ability to predict the kind of device it needs to build to be successful. When this happened with the PlayBook, it was viewed as a one-off deal, a mistaken foray into a business outside of BBRY's main business. But to have so badly overestimated demand for the Z10 suggests the company can no longer rely on its ability to gauge where the market is going.

[Tre Lawrence]

Good point. You know, if I just ignore all the questions I missed on the SAT, I "basically" got a perfect score.

In all seriousness, the problem with this write-down isn't just the sheer dollar value; it's also the confirmation that BBRY apparently has lost the ability to predict the kind of device it needs to build to be successful. When this happened with the PlayBook, it was viewed as a one-off deal, a mistaken foray into a business outside of BBRY's main business. But to have so badly overestimated demand for the Z10 suggests the company can no longer rely on its ability to gauge where the market is going.

Probably only focused on feedback from its, uh, prosumers.

I might as well add "prosumers" to my keyboard dictionary. It's a sexy word, and fits very well with "mobile computing, BBRY-style).

[Andy321]

Point is that there is a difference between a write down in the value of an asset (inventory) and an operating loss. For example, if your house lost 20% of its value in the housing market, but you still have your job and are making ends meet, you are 20% poorer, which is not good obviously, but you are still living within your means so you aren't going to be lining up at the food kitchen just because you lost that value.

Posted via CB10

[Triplell]

Point is that there is a difference between a write down in the value of an asset (inventory) and an operating loss. For example, if your house lost 20% of its value in the housing market, but you still have your job and are making ends meet, you are 20% poorer, which is not good obviously, but you are still living within your means so you aren't going to be lining up at the food kitchen just because you lost that value.

Posted via CB10

Except this is a business, and one that has been consistently losing money over years, with very little hope to rebound. That is how businesses fail.

[xBURK]

So, doesn't the Z10 assembly line not have a big red button to hit? Did someone not get the memo to halt production? For the Love of God, how does this happen? I can think of a few people who deserve a layoff. MANAGEMENT!

Posted via CB10

[project_x]

The write down can't be from the cost of assembly. The production cost is around $200. they could sell every single one of them at $200 without contract in about 8hrs, selling direct. In fact if they sold to the wireless companies, at $200, they could all give us a credit on contract......


Posted via CB10

[sentimentGX4]

Point is that there is a difference between a write down in the value of an asset (inventory) and an operating loss. For example, if your house lost 20% of its value in the housing market, but you still have your job and are making ends meet, you are 20% poorer, which is not good obviously, but you are still living within your means so you aren't going to be lining up at the food kitchen just because you lost that value.

You are 20% less valuable, however, and that's the only thing that matters to stockholders. Also consider the case in which you still have a mortgage on your home.

So $945,000,000 / $200 = 4,725,000

You think they had almost 5million Z10s on the shelves? The Playbook should have taught them better...

I wouldn't be surprised if BBRY had hoped for a Windows Phone scale sales. BB10 wasn't supposed to be the next Playbook. This was do-or-die bread and butter product for the company.

If initiated properly with a compelling product, I do believe that those numbers could have been achieved. (Whether BBRY could have actually stayed afloat with those numbers is another issue.) Unfortunately, BBRY did everything, and I mean EVERYTHING, wrong.

[FSeverino]

One problem is selling those leftover phones. It's going to be tough to convince people to come over to BlackBerry at this stage.

Posted via CB10

PlayBook is STILL selling... not high numbers, but people are buying it, after 2 years and an EOL announcement

Posted via CB10

[cgk]

PlayBook is STILL selling... not high numbers, but people are buying it, after 2 years and an EOL announcement

Posted via CB10

like the touchpad before it, these will be garbage hunters people unwilling to pay top dollar for kit, hardly the 'prosumers' that BBRY claims to be chasing.

[jh07]

PlayBook is STILL selling... not high numbers, but people are buying it, after 2 years and an EOL announcement

Posted via CB10

You can do a lot with the PlayBook now with really no support from blackberry. Great browser, stream movies, and a lot more.

Posted via CB10

[JeepBB]

So, doesn't the Z10 assembly line not have a big red button to hit? Did someone not get the memo to halt production? For the Love of God, how does this happen? I can think of a few people who deserve a layoff. MANAGEMENT!

Why, yes, it does, and yes they did... but way, way too late to matter!

Those Z10's have clearly been rolling off the production lines and straight to a warehouse shelf for many months now. And as the Z10 is regarded as EOL now according to several reports here, they'll need good luck in selling them now.

According to several sources: initial production rates were 2M units/month... then 1M units... then 900k/month. Despite BB's "lack of clarity" regarding BB10 sell-through, it's now obvious that Z10 monthly sales have never been anything close to matching those production runs and the billion dollar write down is the result.

Hubris?

[jcsf123]

Chris Umis, article said that if you ignore the inventory write down they basically break even.

Posted via CB10

If you ignore the shooting Mrs. Lincoln the theatrical performance was basically pretty good.

[jh07]

If you ignore the shooting Mrs. Lincoln the theatrical performance was basically pretty good.

That is one of the best comebacks I ever seen or heard.

Posted via CB10

[jh07]

Chris Umis, article said that if you ignore the inventory write down they basically break even.

Posted via CB10

Well I think the shareholders would disagree. There is too many people that live and breath on what Crackberry has to say about BlackBerry. People need to look into other resources for information before they make their minds up.

Posted via CB10

[milo53]

One problem is selling those leftover phones. It's going to be tough to convince people to come over to BlackBerry at this stage.

Posted via CB10

Perception, many of us got screwed on the playbook matter. Now, after all this negative press and the reality of the situation, who will buy this product? My employer bailed, 5,000+ units with Enterprise, because of the lack of stability. My kid, 13 yrs old, understands this and would not consider this product. Is he a Prosumer? Am I? These Slobs created this situation. BOD, please act fast, this f'dup ameteur hour is over, NOW! It's not too late, make a radical change Monday.

[jh07]

Perception, many of us got screwed on the playbook matter. Now, after all this negative press and the reality of the situation, who will buy this product? My employer bailed, 5,000+ units with Enterprise, because of the lack of stability. My kid, 13 yrs old, understands this and would not consider this product. Is he a Prosumer? Am I? These Slobs created this situation. BOD, please act fast, this f'dup ameteur hour is over, NOW! It's not too late, make a radical change Monday.

I agree, it's going to be almost impossible to get the public or business to trust BlackBerry to believe in them. I don't know what a prosumer even is.

Posted via CB10