Celestica Hit by RIM's Dwindling Popularity
Toronto-based Celestica announced today its plans to wind down manufacturing services for Research in Motion over the next three to six months. Said to be a part of RIM’s plans to cut down on manufacturing and supply chain costs, Celestica plans to work closely with the BlackBerry maker throughout the transition.
Due to this manufacturing wind down, Celestica will restructure its operations—a cost that is not to exceed $35 million. Although little information has been released, Celestica will announce more on what this means for the company this upcoming Friday at its second quarter results announcement. Celestica did release its anticipated second quarter revenue results expected to be in the range of $1.65 to $1.75 billion.
This partnership end shows RIM is still struggling to survive throughout this year. With the announcement of the discontinuation of its BlackBerry PlayBook 16GB version earlier this month it seems RIM is going out of its way to cut costs while focusing on the few money making products it has left.
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But there’s not all bad news for RIM. The company showed off its highly anticipated (and long awaited) BlackBerry 10 platform at its 2012 BlackBerry World Conference. RIM states that it is still on track to launch its BlackBerry 10 platform in the second half of 2012.
“RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters,” said RIM President and CEO Thorsten Heins in late May.
Will we see fruitful financial results from RIM’s cost cutting techniques or are these plans coming just a little too late? Additionally, many are still skeptical on how the BlackBerry 10 will perform within the highly competitive smartphone market and whether it will be RIM’s saving grace. What’s definite is RIM will have to fight hard in 2012 to avoid what some see as the company’s inevitable end.