Following weeks of equally worse news for Research in Motion, one of its oldest hardware manufacturing partners in Celestia, which is also based in Canada has announced in a formal but terse press release that the firm will be transitioning away from manufacturing devices developed by former partner Research in Motion.
This follows the recent confirmation by the beleaguered platform and hardware developer that it will be taking steps to write down up to a staggering US$1 billion in unsold inventory across its current North American product line, which follows a similar writedown taken late last year for $400 million in unsold PlayBook inventory, which culminated in the short-term fire sale to employees and consumers while raising serious concerns regarding RIM’s capability to sell the previously noncompetitive tablets.
The tablets were derided by critics and consumers for lacking features common to the majority of tablets, features that were only recently added in a long-awaited and long-delayed update which rolled out this past February. With Celestica moving away from BlackBerry hardware production, this only serves to add to RIM’s growing short-term problems, as the company is attempting to weather the transition from its current platform in OS 7, being the last version of the Java-based platform that it began using in 2003 to BBX, which is the QNX-based platform which shares major underpinnings with the BlackBerry PlayBook while also adding features common to iOS and Android, but will not be released until this Fall, after initially being targeted for a February launch.
As a result of the the above, RIM’s unique co-CEO arrangement was to be dissolved with Lazaridis and Basillie resigning on the evening of Super Bowl Sunday this past February in order to install Thorsten Heins, who is currently attempting to correct RIM’s course in terms of declining marketshare in the US and Canada despite recording massive growth in Southeast Asia and Europe in recent quarters. What remains to be seen is how this announcement will affect RIM’s outlook in the short-term, as losing such a long-standing hardware partner is already being seen as another blow for the struggling company, especially as it faces yet another writedown.
Celestica will provide more detailed information regarding the decision on July 27th during its investor conference call and provide a companion press release detailing the decision on the same day.
