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Celestica to stop manufacturing for RIM
Celestica has been manufacturing RIM’s hardware for for years. In Q1 Toronto-based Celestica reported that their RIM business accounted for a whopping 19% of total revenue (down from 32% Q1 2011). Unfortunately due to RIM’s lack of products, plus consumers lack of interest in those products, Celestica has decided they’ll “wind down its manufacturing services” for RIM. This will not happen overnight, it’ll take place over the next 3 to 6 months. Celestica said in a statement today that they’ve “been working with RIM as it assesses its supply chain strategy. Celestica estimates that prior to any recoveries, its restructuring charges will not exceed $35 million.”
The timing of this announcement is very interesting. Over the next 3-6 months is exactly when RIM will launch their new, very anticipated, BlackBerry 10 handsets. Full press release below.
June 18, 2012
TORONTO, Canada – Celestica Inc. (NYSE, TSX: CLS), a global leader in the delivery of end-to-end product lifecycle solutions, today announced that over the course of the next three to six months, it will wind down its manufacturing services for Research in Motion (RIM).
Celestica has been a high-performing manufacturing supplier for RIM and will work closely with RIM throughout the transition. As discussed on the company’s first quarter results conference call on April 24, Celestica has been working with RIM as it assesses its supply chain strategy. Celestica estimates that prior to any recoveries, its restructuring charges will not exceed $35 million.
More details about this announcement will be provided as part of the company’s second-quarter results press release and conference call, which are scheduled for Friday, July 27.
In addition, Celestica is reaffirming its second quarter financial guidance that was provided on April 24. The company anticipates revenue to be in the range of $1.65 billion to $1.75 billion, and adjusted net earnings per share to be in the range of $0.20 to $0.26.
Source: Celestica
Via: PhoneArena
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37 comments for “Celestica to stop manufacturing for RIM”
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This only makes sense:
Celestica makes HARDWARE, nor Vaporware!
Celestica is just filling up the last orders/contracts
Celestica sees that there is no BB10 in the pipeline.
RIM confirms with this that:
-There are no BB10 phones (to be made overseas at the best)
-They are dividing the company in parts and the Hardware division has no future.
-They have no firm date for BB10 phones.
-At end of June for an October-November release they should have screen suppliers, manufacturers (Foxconn, Celestica, etc) and the testing roadmap for operators all over the world. There is no talk about that and the phone is supposed to come in November??
-You see what you want to see, but there is no BB10, only playbooks at $99, wait for June 28 (Q1 report) or mid July ( dust will settle) and we will see how will RIM be divided into and how much cash they have and if they will make it to the end of the yr.
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What more signals do you need?:
-Executives leaving
-Sachman’s Banker appointed in the Board
-CEOs getting “Bonuses” (While there is still cash)
-NO FIRM date of BB10 release since Summer 2011.
-At this point RIM should have the manufacturer and screen/CPUs/GPUs production reserved, from other manufactureers like Apple, Samsung LG etc. There is no talk about that, simply because there IS NO BB10 PHONE!
-Now Celestica the maker of phones cuts ties on them ( if you were them, would you keep on making 9320 with a BBM button or free your production lines to make phones that sell??)
-THE END.
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No it just means that they will shift the production to their Mexican production plants.
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More bad news for RIM *sigh*
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its actually probably going to be good news, they will pull an apple and have the products made better and cheaper in an other country allowing the company to save money which will make shareholders happy. AND NO BBM 10 yet jackass.
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Are you implying that BBM will not be on the BB10 phones (as was the case with the Plaything)?
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My apologies I might be the jackass, I meant to say NO BB 10 yet!
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Meh…do none of you ever read company wire messages?
All this means is Celestica is not being used going forward.
Nothing to do with BB10 or the viability of RIM.
i.e. This is about Celestica losing RIM’s business.
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Its because no one is buying BBs so they don’t need to make any more.
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Which leads me to wonder where the author of this piece got the idea of “Unfortunately due to RIM’s lack of products, plus consumers lack of interest in those products,…”
There is nothing in this press release that indicates anything other then Celestica got taken out.
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Sorry Meh, but there is nothing in that press release that indicates this is anything but Celestica losing a contract for future models.
Companies do not ditch future possibilities voluntarily, even one so perilous as RIM. $ is $.
This is RIM telling Celestica to go bye bye.
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Nope!
This is about Celestica freeing their production lines for phones that SELL. Celestica’s production lines were running as slow as the contract with RIM would allow them. Now Celestice will reconfigure the production lines and get them to run at 100% capacity againmaximizing the profits again.
The problem for RIM is that getting another production slot with Celestica or Foxconn on time to get phones ready by Xmas is simply impossible:
ONCE YOU HAVE THE PHONE SPECS:
Takes about 2-3 months to create the production line, 1-2 weeks to test it; then make the Release To Market units for testing in Operators all over the month, that takes 1-2 months; then develop specific bloatware; then run the lines full capacity for a month or so to accumulate enough units to have for launch ( Apple produces iphones for 6 weeks before selling 10 million units on release weekend; while Samsung took 2 months to make enough SG3s to make over 12 million units) Samsung delayed Canadian release because there are 9 million units pre-sold. and “releasing” it on June 20th, would guarantee a 1-3 units per store and a PR nightmare.
That’s how the phone cycle works. RIM doesn’t have a phone, and even if they had, everybody is commited by now for Xmas. And that’s How realit works, but RIM works on “Laza-Reality”
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Blackberries retired with their creator, Jim Balsillie.
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No it’s not the end. they have always had a relationship with a Mexican Plant. they will likely be more than happy to pick up the slack.
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This piece is full of nonsense. All this means is that RIM will not be using Celestica for manufacturing or BB 10 hardware. That’s probably a good thing as RIM likely will use a more cost effective Asian ODM to build the new phones and tablets. Which means better margins for RIM which means that things going FORWARD are looking up for RIM.
All the doom and gloom news about RIM is related to things that have happened in the past not whats coming down the pipeline. This is not the end of RIM and it is not even a bad sign that things are getting worse for RIM. We know that traditional BB OS hardware is being phased out, that’s not news.
Why not report on BB 10 Jam Tour and tell your readership what developers are saying about what is coming.
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good point KC….they are phasing out old os, but will still take a few years. Funny part about this is, alot of people are still using 8700 models from 6 years ago and they still work. goes to show you some of the quality that used to exist…before looks became the main concern for purchasing hardware. As well, for all the negative people…they are still selling 7.1 because they realize there is a market for people who can’t afford or don’t want the iphone/androids. Most baby boomers want an easy to use phone with a keyboard. RIM has solved that niche.
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Four*
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NVP, you REALLY got to get more objective.
Do you seriously think Celestica is the only maker in the market RIM has been talkign with?
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Please, ppls take it easy, Rim is restructuring for the future, every company goes through a phase, I believe Rim wants to gives us their best products to make our lives a little easier and more social. I’m being patience and looking forward to having a new BB10 Phone. This past weekend I bought BPlaybook and the BKeyboard. Amazing!!
ILoveiT!!
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I could have sworn I seen they Celestica was taking another hit not reported here to the tune of a Billion bucks over non moving stock.
RIM is pretty much done.
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Correction, I had read that RIM is sitting on roughly a Billion in non moving inventory.
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Sing to the mountains,
Sing to the sea,
Raise your voices, lift your hearts!
This is the day that Rim has died,
Let all the earth rejoice!
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RIM isn’t going to stop making Blackberry’s, they’re just going to stop making them with Celestica.
If you’re a sales man and you lose a sale, that doesn’t mean you’re not a sales man anymore. You sell to someone else.
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I love how the first 10 comments are trolls. Go home you iLosers.
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How many people here like KFC’s chicken?
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Chicken is one step above seagulls aka sheethawks.
It simply is gross.
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