PlayBook Plays RIM for $485 Million Q3 Loss
Research In Motion (RIM) today said that it would record a pre-tax provision in the third quarter of approximately $485 million related to the poor performance of its BlackBerry PlayBook tablets.
RIM reports shipping a disappointing 500,000 of the devices in the first quarter, 250,000 units in the second and now just 150,000 in the third quarter. However, sell-through to end users was higher than that 150,000 in the third quarter. The company is scheduled to announce full third-quarter earnings on Dec. 15.
In a press release, RIM said it now believes that an increase in promotional activity is required to drive sell-through. RIM attributed the poor sales to what it called "recent shifts in the competitive dynamics of the tablet market," as well as to the delay of the PlayBook OS 2.0 software. The company said the next iteration of the QNX-based PlayBook platform will be available for download in February of 2012.
The PlayBook has seen a dramatic reduction in price over the past few months both here in the United States and in Canada. RIM originally priced the PlayBook at $499 (16GB), $599 (32GB) and $699 (64GB) but those prices have been slashed for the holidays. The PlayBook has been reduced to $199 (16GB), $299 (32GB) and $399 (64GB) on the company's online BlackBerry store until tomorrow.
Mike Lazaridis, co-CEO at RIM, said in a statement that early results from recent PlayBook promotions indicate a significant increase in demand across most channels.
"We look forward to continuing to grow the installed base of PlayBook users and to attracting more and more developers to expand the volume of applications, content and services that leverage the power of the industry leading QNX-based platform," Lazaridis said in a statement.
Lack of applications for the PlayBook has been a major problem for the company. RIM has promised a virtual Android environment for the PlayBook that would allow users to download and run Android apps on the device, but that software has not made it beyond a private beta version.
Shares of RIM were down 8.23 percent to $17.05 in early morning trading.