Unsold PlayBooks cost RIM $485 Million
According to a statement released by Canadian company, Research in Motion, a pre-tax provision of $485 million ($360 million after tax) will be taken in Q3 due to unsold inventory of the BlackBerry PlayBook. In other words, RIM will be setting $485 million aside from its profits in order to cover losses that it expects to incur due to unsold PlayBook tablets.
The company is claiming that “recent shifts in competitive dynamics” along with “a delay in the release of the PlayBook OS 2.0” are the culprits behind the tablet’s slow sales and that without
a TouchPad-like firesale increased promotional activity they won’t be able to move the necessary quantities. In addition, only 150,000 BlackBerry PlayBooks were sold this past third-quarter, even after the company aggressively reduced prices in time for Black Friday.
Surprisingly, the bad news doesn’t appear to have decreased RIM’s faith in the tablet market or the PlayBook, as co-CEO, Mike Lazaridis, stated that:
“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers that also offers unique security and manageability features for the enterprise.”
RIM's first entry into the tablet market was less than optimal, as the company failed to include a native email client and the promised Android app simulator has yet to be released. Nonetheless, the company appears to be attempting to weather the storm, and we'll have to wait and see what happens.