Enormous inventory costs have been incurred by Blackberry because of unrealistically high expectations for their new smartphone, the Z10

Article: http://www.itpro.co.uk/mobile/20680/blackberry-hit-934m-inventory-charge-over-unsold-z10-smartphones

Blackberry has just received a monstrous $934 million loss due to their inventory charge on unsold Z10 smart phones. They had extremely high hopes for this new smart phone release, believing that it would be the solution in their quest to regain their previous stronghold in the smartphone market. The physical keyboard that Blackberry had previously built into their phones was very attractive to text communicating consumers. I believe this particular segment of customers represented a high percentage of their overall customer base. With an all touch screen front and no physical buttons, I’d say that their new smartphone was tailored to lure in a younger audience; however, I believe this new design may have had the unintentional side effect of causing it to be more closely compared to their main competitor’s product, the iPhone 5S. With relatively similar designs, the main comparison points between the two would essentially be brand name, functionality, and price. With Apple having successfully marketed their smartphone as “premium”, Blackberry’s Z10 appears to be “second tier” in comparison. It would have been beneficial for Blackberry to “test the waters” and get an idea of how well their new product would do over a trial period, even if this would inevitably lead to a higher demand than supply. A higher demand would have been much less dangerous to Blackberry than the current reality they face.