RIM's culture under Mike & Jim and its effects
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I believe Birdman's point was that BB will provide such a small order to Foxconn (anything under 1M handsets is small I reckon), that Foxconn won't be able to negotiate a significant discounts on screens, chips, etc from the component supplier. So the cost of the screen that goes into a BB handset, even if it was identical to the screen going into an Android handset, would cost BB/Foxconn more... and that additional cost would normally get passed onto the end-consumer. The Android customer would be able to take advantage of the bigger discounts the component supplier gave in return for the much larger order size.
And it really does make a difference. The Z3 came out at $200. Similarly spec'ed Android handsets were closer to $100. As has been said many times on these forums, BB can't compete on price because otherwise they'd be selling below cost.
So, nothing to do with Foxconn's where-with-all, everything to do with quantity discounts.mornhavon and LuvULongTime like this.02-21-15 10:23 AMLike 2 -
Another factor is that with Foxconn taking on the unsold inventory risk, they are producing smaller runs at one time (increased costs per unit) and undoubtedly require a significantly higher share of the profits.
That's why I don't think the often-quoted "10 million units/year" level should be treated as gospel. I highly doubt BlackBerry keeps a consistent $/device profit across all of their portfolio. 5 million units of one type of device may earn them more than 20 million of another.LuvULongTime likes this.02-21-15 11:19 AMLike 1 - Based on the demand and market realities, it's reasonable to assume BlackBerry already has a high end touch prototype. The challenge is manufacturing one that has the same specs & performance as today's current high ends at a reasonable price. They don't move enough units to source low cost components. Then they need to convince carriers to order healthy amounts of stock. It would be difficult for them to offer a $900 BlackBerry touchscreen when there's such low demand for the line.
Management realizes this, and Chen himself has said they will not build a touchscreen unless it's distinctively different. That's why the only high end touch we'll likely see in the future is a Passport sequel with no keyboard.
In terms of pricing to specs, I believe the real issue is that BlackBerry thinks/thought people are/were willing to pay a premium for their brand. And not that they can't source components cheaply enough. I'm hoping it is the past tense and they have realized their brand is worth zilch now and they need to spec and price competitively.02-21-15 11:22 AMLike 0 - Apples influence was a paradigm shift for more than just RIM. Nokia, Microsoft, Palm, Motorola, HP,etc. , to name a few. Not to mention the entire music industry, including Paul McCartney, the founder of Apple the brand. They all fell victims to Apples sue nami. Is it anyone's fault? I don't think so. Most of the company's had the resources and the time to launch an early assault and failed to act effectively. Know one had the crystal ball that everyone claims to have today.
RIM was in the best position to contend and failed to act quickly for sure. They have been strung up for it ,and then some, along with their employees and shareholders. Smeared and degraded for trying to stand up and fight for what they believe is theirs.
I'm a sucker for the underdog, (big mistake for me in life ), I can't stand to see anyone's mistreatment, and I've been around long enough to be able to clearly identify it when it does happen.
Posted via CB1002-21-15 11:32 AMLike 0 - Foxconn build as efficiently as they can but it's the component costs that will always be a large percentage of the handset cost to manufacture. The component supplier will offer discounts if the manufacturer (Foxconn) buys a ton of parts, and typically much bigger discounts as the order size increases.
I believe Birdman's point was that BB will provide such a small order to Foxconn (anything under 1M handsets is small I reckon), that Foxconn won't be able to negotiate a significant discounts on screens, chips, etc from the component supplier. So the cost of the screen that goes into a BB handset, even if it was identical to the screen going into an Android handset, would cost BB/Foxconn more... and that additional cost would normally get passed onto the end-consumer. The Android customer would be able to take advantage of the bigger discounts the component supplier gave in return for the much larger order size.
And it really does make a difference. The Z3 came out at $200. Similarly spec'ed Android handsets were closer to $100. As has been said many times on these forums, BB can't compete on price because otherwise they'd be selling below cost.
So, nothing to do with Foxconn's where-with-all, everything to do with quantity discounts.02-21-15 11:34 AMLike 0 - We do not know BlackBerry's cost to make handsets nor are we subject manner experts. ( Troy might be ?? but I am certainly not)
This is what one smartphone maker said:
This Is How Xiaomi Keeps The Cost Of Its Smartphones So Low | TechCrunch
It is possible to rationalize your product line to reduce the cost of your component parts. The trouble is that you want to be ahead of the curve so that your device does have a decent shelf life.02-21-15 12:10 PMLike 0 - BB hasn't ever produced a significant amount of their phones themselves - they did have their own production facilities, but they were relatively small. The vast majority of phones were and are made by third-party contractors. Jabil Circuit of Florida was the biggest contractor, and have manufacturing plants in Asia, Eastern Europe, and South America. They were the manufacturers of the majority of BBOS phones, as well as the first 4 BB10 phones: Z10, Q10, Q5, Z30.
All of those phones were designed by BB's own in-house design staff, which still exists but is now much smaller. BB no longer has any production facilities of its own (they were closed and sold off in 2013) beyond perhaps the ability to make small batches of prototypes. Besides Foxconn, it seems they have another manufacturer, but I've not seen anything publicly about who that might be - it could all be Foxconn, with the difference being that the Z3 was completely a Foxconn hardware project (design, manufacture, and inventory management), whereas others are just manufactured by Foxconn. Either way, manufacturing is outsourced for all devices.LuvULongTime and mornhavon like this.02-21-15 01:27 PMLike 2 - Interesting. I was under the impression that the Passport wasn't manufactured by Foxconn, but since Foxconn seems to have a facility in Mexico, and since the specific manufacturer doesn't seem to be known, it looks like it could be Foxconn all around (just with different arrangements regarding design and inventory control, as Troy suggested).02-21-15 01:58 PMLike 0
- BB hasn't ever produced a significant amount of their phones themselves - they did have their own production facilities, but they were relatively small. The vast majority of phones were and are made by third-party contractors. Jabil Circuit of Florida was the biggest contractor, and have manufacturing plants in Asia, Eastern Europe, and South America. They were the manufacturers of the majority of BBOS phones, as well as the first 4 BB10 phones: Z10, Q10, Q5, Z30.
All of those phones were designed by BB's own in-house design staff, which still exists but is now much smaller. BB no longer has any production facilities of its own (they were closed and sold off in 2013) beyond perhaps the ability to make small batches of prototypes. Besides Foxconn, it seems they have another manufacturer, but I've not seen anything publicly about who that might be - it could all be Foxconn, with the difference being that the Z3 was completely a Foxconn hardware project (design, manufacture, and inventory management), whereas others are just manufactured by Foxconn. Either way, manufacturing is outsourced for all devices.02-21-15 02:51 PMLike 0 -
- Great post and no disagreement here. Here is a question for everyone. Is the Foxconn deal a help or hindrance to BlackBerry? The initial idea, and one that Chen promoted, was that Foxconn had greater economies of scale and could produce phones at a better price. But can they? Considering BB is ordering small volumes of devices AND they need to share any profits with Foxconn, what is the point? I think the real reason for the Foxconn deal was to save BlackBerry from their own stupidity WRT inventory management. They struck out three times with the PB, Z10, and Q10. Maybe Heins gave up and signed the Foxconn deal to save BB from themselves? Now that Chen seems to have a handle on how to produce inventory in house (Passport being a good example), maybe they apply these new philosophies to any new HW they produce moving forward. Make small batches and keep all ALL the profit.
Posted via CB1002-21-15 08:08 PMLike 0 -
- Sue Nami is the calm before the storm.
Mother Nature�s messenger. A Harbinger (of things to come.)
Here's another
Knit pickers have a very small hook, so you can pick up hard to catch stitches on lace, socks, or even underwear,
Posted via CB1002-21-15 11:29 PMLike 0 - We know that the Classic is being manufactured by the Taiwanese company Wistron (formerly the manufacturing arm of Acer, but which was spun off back in 2000). Wistron makes a ton of stuff, including being one of the manufacturers of LNBs (the "nosecone" electronics) for both DirecTV and Dish Network satellite dishes. I still haven't heard who was manufacturing the Passport, but it's likely one of the two (Wistron or Foxconn/Hon Hai).04-15-15 10:28 AMLike 0
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