RIM to parts suppliers: hook it up!
It’s a recession people, and in a recession the name of the game is to keep sales as steady as possible while reducing costs as much as possible. For countless companies this means unloading employees but as RIM’s market share continues to surge, the Canadian handset maker is taking a different approach; use its solid sales to squeeze better prices out of its suppliers. Based on iSuppli’s estimates, BlackBerrys do have a fairly substantial cost to RIM with the Bold running the company approximately $170 per unit and the Storm running about $203 per unit. Considering the volume we’re dealing with here, if RIM can knock even a few pennies off the cost of certain parts the result will be huge. RIM Co-CEO Jim Balsillie stated recently that the company’s efforts to lower costs will be felt this quarter, meaning it is already making some good headway. We can only hope that reduced cost doesn’t translate into reduced quality — it would be hard to find even the most avid BlackBerry fanboy who would deny that BlackBerry devices don’t exactly top the charts where build quality is concerned. If suppliers are forced to lower their prices to accommodate pressure from RIM, something has to give lest they eat into their own profits.
Zach Epstein
Zach Epstein is the Executive Editor of BGR. He has 10 years of industry experience, first in marketing and business development with two private Telcos, then as a writer and editor covering business, technology and telecommunications.
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