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RIM rollercoaster continues to unravel as it plummets downhill

Waterloo, Ontario-based smartphone maker Research in Motion, Ltd. (TSE:RIM) is facing a potential end-of-life scenario as it scrambles to deploy its next generation BlackBerry 10 (BB10) operating system to market.  BB10 was supposed to arrive early this year, but instead was pushed back to a late 2012 launch.  Customers were left waiting... and waiting.  

Except most didn't wait.  Most moved on to other platforms like Google Inc.'s (GOOG) Android or Apple, Inc.'s (AAPL) iPhone.  RIM has seen market share of its defunct BlackBerry 7 operating system plunge into free fall.

The latest sign of the company's sales woes comes as Canadian manufacturing partner Celestica Inc. (TSE:CLS) announced it would "wind down" production of BlackBerries and commit to "restructuring" to produce more popular devices -- like Android smartphones.

RIM is accumulating a soaring inventory of unsold handsets and its CEO Thorsten Heins talked about "streamlining" his company's workforce and supply chain.  Apparently part of that process is to bid farewell to one of the company's longest term domestic manufacturing partners.

It's no big loss to Celestica, though.  Celestica expects revenue of between $1.65B and $1.75B USD -- and it only expects a $35M USD hit from the RIM phaseout.

The exodus from RIM is not limited to customers and suppliers.  RIM has also seen many of its most promising executive talents jump ship to more successful firms, as it's been left to make due to with castoffs from other bankrupt or struggling firms.

It seems that RIM will likely survive long enough to deliver BB10 out of sheer stubborn will, if nothing else.  But amid mounting financial losses and a complete dissolution of the company's assets from head to tail, the question will be what will be left of it when it gets there.

Source: Celestica





"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis



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