RIM drops long-time manufacturing partner Celestica ? Computer ...

For years, two Ontario-based companies have bee churning out some pretty popular smartphones. Waterloo?s RIM designed the devices and developed the software, and Don Mills? Celestica provided the manufacturing muscle. The two had a good thing going, but as they say ?all good things must come to an end.?

With RIM facing stiff competition from the iPhone and a bevy of Android superphones, the?BlackBerry?s descent from the top has been a rapid one. Now, with Windows Phone beginning to make gains, RIM has shuffled the deck and handed over the reins to new CEO Thorsten Heins ? who has been charged with the unenviable task of righting the ship.

There was no doubt that the Heins era would kick off with a long, hard look at ways to reduce expenses. In addition to laying off thousands and thinning out the corporate ranks, RIM also needed to find out where they could trim manufacturing costs. Their arrangement with Celestica, it seems, was on the chopping block.

RIM has agreements with other firms? like Quanta Computer, the Taiwanese company that produces the BlackBerry PlayBook and Jabil Circuit, ?a global manufacturer headquartered just a stone?s throw away from where RIM holds their annual BlackBerry World conference. Jabil is expected to benefit from the shift away from Celestica, but Quanta could, too. That developer phone running BlackBerry 10 looked a lot like a scaled-down PlayBook after all.

While the loss of RIM?s business will certainly hurt Celestica in the short term, they?re anticipating only about $30-40 million in restructuring costs to re-fit their production lines for the post-RIM era ? not a huge sum in global manufacturer?s terms. They?ll continue to pump out enterprise hardware for companies like IBM and Cisco, and will no doubt look on with great interest as RIM prepares for the product debut that many think could make or break their future.

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