ACCOUNTING 1202BlackberryCase
Document Content and Description Below
Accounting 1202
Blackberry Case
Blackberry is a smartphone company, that like many others, experienced struggles when
Apple introduced the iphone into the smartphone market. In this case study, we
...
found some
crucial mistakes that the company made, as well as analyzed their financial statements to
uncover a little bit more of the story the company tells.
The key success factors for competing in the smartphone industry include managing the
relationships with device manufacturers, wireless carriers, and end consumers effectively,
because with a loose end in triangle for Blackberry could mean detrimental effects to the sales
of Blackberry smartphones. For Blackberry to be successful, the carrier’s scale of operation,
sales, and brand recognition were crucial. The problem with the Z10 and Q10 smartphones,
This study source was downloaded by 100000793680026 from CourseHero.com on 04-02-2021 17:29:50 GMT -05:00
https://www.coursehero.com/file/23334729/BlackberryCase/
This study resource was
shared via CourseHero.comwas that the wireless carriers did not want to buy them to sell to their consumers, because the
end customers were not demanding them at large enough quantities. This causes a huge
missing link needed for success in the smartphone industry, and the two types of smartphones
were not responsible in Caldwell’s eyes for the expected turnaround of the company’s poor
hardware sales, as they clearly did not sell the expected amount of inventory. Caldwell went
straight to the source of a missing link, the wireless carriers, and saw they were incentivizing
customers by cutting their prices of Q10 and Z10 to sell to customers, but the original blackberry
held its value. The problem for Blackberry, was not effectively spending their research
development account, they spent it all on the new touchscreen interface to compete with Apple,
without realizing they were completely abandoning their loyal target market who wanted
Blackberry for the email and security features.
To go forward, Blackberry can compete with companies like Apple, Google and
Samsung by improving the operating systems, the could utilize third party operating systems
management, an array of applications available, and adjust the absence of the touch screen
because it limited the amount of applications that a user of blackberry could use. Also to move
forward, the Research and Development originally conducted did not address the target
audience that mattered the most to Blackberry, those using the smartphone for its security and
email capabilities. Instead, it tried to reach a similar target market of Apple, which attracts a
different kind of consumer.
When the question is raised as to whether or not an impairment charge is necessary for
Blackberry, the answer is that it absolutely is necessary. Without an impairment charge,
Blackberry is not showing the true value of their assets. With their assets displayed at their true
EXHIBIT 1: CALCULATION OF IMPAIRMENT CHARGE
Z10
Estimated cost per unit: $595-$615
Additional costs: $12
No. of Units produced: 1350600
Assuming the cost per unit is
$605 [(595+615)/2] + 12 = $617
Inventory Value= No. of units * Cost per unit
[Show More]
Last updated: 3 years ago
Preview 1 out of 8 pages
.png)
.png)
