RicDay on Publishing

Lazy, sloppy, or plain incompetent? I am unsure which applies to journalists who equate “shipped” with “sold” in business articles.

“Shipped” means the manufacturer sent cartons of the product to retailers. In consumer electronics, those shipments are returnable if they do not sell. “Sold”only has one meaning in measuring company performance: someone purchased a product and left the retail store with it.

Is that difference hard to understand?

Yes, it is common for tech companies to book revenue for their products when they are shipped to retailers (and it is equally common to see “adjustments” on their books when some of those products are returned). But that is just an accounting dodge. It does not change the “shipped” versus “sold” reality.

Research in Motion (RIM) provided a stellar example last month, of what can happen. RIM announced in late November that finished goods (manufactured, probably shipped, but not sold) inventory had ballooned from $94-million to $298-million in the latest quarter. Analysts quickly pointed to the PlayBook tablet as the problem.

I had seen PlayBooks piled up, literally gathering dust, at my local Chapters-Indigo bookstore, Best Buy electronics store. Staff at both confirmed “they don't sell.” Price would not have been a major issue; both stores are in a suburb where home prices tend to have seven digits before the decimal point.

Until that November report, the PlayBook (a very flawed device) had been touted as one of the best-selling tablets. Estimates of more than 1-million sold were made, contrary to the evidence on display at retail.

So it looks like RIM shipped over 1-million PlayBooks and sold (according to RIM executives “over 150,000” in the quarter).

The only tablet maker which is transparent about its sales numbers is Apple, who report them in their quarterly SEC filings. The others seem to rely on journalists to report shipped numbers as sold in the hope that consumers are dumb enough to take the information as the truth.

Journalism on the Web has gone seriously soft, if not corrupt, pandering to click-through numbers and advertisers. It is sad to see this happen, especially on large, corporate news sites.