NEWS: Netpliance STOPS i-opener sales
Well, this morning's horrible news wasn't quite what I expected, of course. I did think that perhaps Netpliance would ultimately have to face the GLACIALLY SLOW sales problems, but I just didn't think such drastic measures would be taken so soon.
To sum up for those who didn't read the official statements, here's the news in a nutshell:
1) Netpliance admitted this morning that its attempt to position the i-opener as a consumer product has failed. They have cancelled further shipments from the hardware manufacturer Quanta, and paid that company a $6 million dollar penalty for early contractual cancellation.
2) Netpliance plans to continue internet service for existing customers for as long as they remain in business. However, they will accept no new orders for i-openers after January.
3) Netpliance reduced their workforce by 38% and is restructuring as a business-to-business ("B-to-B") entity.
4) All further consumer marketing (Parade magazine, etc.) is cancelled.
5) They increased their sales from 44,000 to 49,000 in the third quarter. They have 27,000 i-opener units in inventory and aren't sure how to liquidate those yet.
6) Kent Savage has been demoted to Vice President of Sales and Marketing. John McHale is still captain of the team overall, retaining his status as Chairman and CEO, barring some stockholder revolt or the like.
7) No statements were made with respect to whether CompUSA, Circuit City, or other retailer would continue to sell a product that will be discontinued regardless in January.
8) Netpliance states that they have enough cash on hand to continue operations for 12 more months without any further infusion of revenue or investment.