BlackBerry Lose Nearly $1 Billion From Unsold Z10 Inventory Write-Down
Ryan Martin / 4 years ago
When BlackBerry released the Z10 handset back at the end of January this year they hoped the smartphone would sell really well and turn the company’s fortunes around somewhat. However, in a rather unfortunate turn of events the BlackBerry Z10 has actually made things worse, rather than making things better. According to BlackBerry’s latest second quarter fiscal 2014 results the company had to pay a $934 million, just shy of $1 billion, inventory charge for the write-down of Z10 inventory. What this means is that BlackBerry scheduled the production with its suppliers of more handsets than were demanded by consumers. The end result is a tonne of unsold inventory that someone has to pay for and in this case it’s BlackBerry that are paying for it.
For those who remember Microsoft had a similar inventory charge for writing down stock of Surface tablets but that was around $900 million and Microsoft are a much larger company. BlackBerry’s Q2 revenue of $1.6 billion was more or less totally obliterated by the Z10 inventory write-down and BlackBerry ended up with a final GAAP loss of $965 million. The additional losses incurred were due to corporate restructuring according to BlackBerry. BlackBerry also stated the majority of the 3.7 million handsets sold in Q2 were older BlackBerry 7 devices meaning sales figures for the newer Z10 and Q10 handsets were probably quite grim. BlackBerry claims despite all the disappointment it saw strong growth among its enterprise BES 10 customers.
Image courtesy of BlackBerry