Peter Misek, an analyst at investment banking firm Jefferies, has been going through RIM's books and thinks that gross margins on hardware fell to 20 percent in the fiscal year that ended in early March. The year before hardware had a 36 percent margin.
Misek said that after assigning operating costs and including inventory charges, and taking away the number he first thought of, the hardware division likely spent four percent more than it took in.
RIM has written down the value of its product inventory in its last two quarters, and Misek expects it will have to do the same thing again in the second quarter.
According to Reuters, RIM is not saying any more than it told the regulators in its recent filing.
The Canadian smartphone company delayed the launch of what many analysts consider its make-or-break BlackBerry 10 phones until late in the year. It is also spending shedloads to prop up its legacy BlackBerry 7 devices.
Misek said that nothing at RIM is going to get better any time soon. Until Blackberry 10 devices are out, the company will have to keep cutting prices.
Several investors and analysts have called for RIM to split its hardware business from its more profitable services unit.
RIM boss Thorsten Heins said last month that he was reviewing strategic options, such as partnerships, joint ventures or licensing of RIM's software. He has not ruled out a sale of anything yet.