Celestica today announced that it will wind down its manufacturing services for Research In Motion within the next six months. RIM was its largest customer and accounted for 19% of Celestica’s revenues for its last quarter despite dropping demand for BlackBerry devices.
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.
RIM is facing a US$1 billion inventory writedown as demands for its devices has fallen short of its sales forecasts.
Celestica is not RIM’s only manufacturing partner. It also uses Flextronics International Ltd and Jabil Circuit Inc. The announcement suggests that Celestica will not be a manufacturer for RIM’s upcoming BlackBerry 10 devices.
Read more: (Source: Reuters)