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Much of RIM's future success hinges on its success (or failure) in the tablet market. The company's first foray into the burgeoning market, the PlayBook, has struggled to gain traction among consumers. In an attempt to increase sales, RIM has slashed the retail cost of the PlayBook by $300, at a total cost of $485 million (pre-tax) in Q3.
Discounting to drive tablet sales costs Canadian company $485 million

BlackBerry manufacturer Research In Motion (RIM) today announced that it would not hit its projected third-quarter revenue estimate of $5.3-$5.6 billion that the Canadian company forecasted at the end of Q2.

The company, headquartered in Waterloo, Ont., pointed to discounting of its already weak PlayBook tablet sales as one reason the company will miss its financial goals. RIM said it was also expecting to miss its projected full-year earnings per share (EPS) of $5.25-$6.

Still, the company says it will stand behind the PlayBook tablet, and that 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 co-CEO Mike Lazaridis said in a press release.

Recently, RIM slashed the price of its PlayBook tablet by $300, bringing the total cost down to $200 (from $500) for the base 16GB model. In an attempt to drive sales, the intense tablet discounting cost the manufacturer a reported $485 million — $360 million after tax. "Early results from recent PlayBook promotions indicate a significant increase in demand across most channels," Lazaridis said.

The company says it will record a pre-tax provision of $485 million in Q3 to write down the value of unsold Playbook tablets, 150,000 units of which RIM says it sold to retail channels in the same time period.

RIM's troubles adjusting to a post-iPhone/Android mobile market are well documented. The company hasn't been helped any by the widespread, media attention-grabbing outages or weak sales of the initially overpriced and not-quite-ready-for-its-closeup PlayBook tablet.

Even reports of unmet quarterly financial goals are becoming a bit of a theme — or recurring nightmare — for RIM. The company is forecasting an even weaker Q4 compared to Q3, "due to several factors including lower than expected sell-through in the third quarter and RIM’s current view of fourth quarter demand."

Sources: BGR, The Globe and Mail

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Like my BB9930 and Playbook
By bchandler02 on 12/2/2011 11:27:06 AM , Rating: 2
I don't know why everyone likes to bash RIM.

I have a BB9930 and a PlayBook(and past devices, 8830, 8330, 9630, 9650).

I don't think anyone can argue that Apple/Android have better support out there from an app/accessory standpoint.

My biggest downfall for Apple is their corporate attitude. They love to deny problems until enough people scream, then acknowledge it. They are also very closed minded in their ecosystem.

Android has the benefit of having multiple hardware choices for the OS, which is really cool, but I think they're almost too open. There are too many apps that I have seen friends use that just have no standard to quality. I've also witnessed drastic differences in hardware quality, and while I'd never buy a low end droid, I can see how it would turn someone off to it because they had the lowest end hardware. I had a D2 Global for a while and it was OK, just didn't fit my needs.

BB fits what I need. Solid phone calls, solid email, solid texting, BBM is a big plus for international messaging, and (the biggest) - battery life. I can squeeze 2 days out of my 9930 on all but my heaviest usage days. Neither Apple or Android can meet that, and to me that is a deal breaker. Yes, application support is limited, but I have all the critical apps I need and almost anything else can be handled through the web browser.

I find it funny how we have accepted < 1 day of battery life as a trade off for cool apps/screens/entertainment devices, compared to 10 years ago when my Nokia 6160 would last 2+ weeks with the extended battery.

RE: Like my BB9930 and Playbook
By bchandler02 on 12/4/2011 12:13:12 AM , Rating: 1
Wow. I get rated down simply for stating a personal view. I guess since it wasn't pro-android or pro-apple (despite me saying they do have their strong points), the fanboys have nothing better to do.

What a bunch of f*cking retards. This is why DT is going to crap.


RE: Like my BB9930 and Playbook
By slunkius on 12/5/2011 1:37:38 AM , Rating: 2
Now you are being crybaby. Don't take it so personally. It just means that some people don't like what you say, but since going into discussion is too time consuming, rating button goes into action.

RE: Like my BB9930 and Playbook
By SandmanWN on 12/4/2011 2:08:12 AM , Rating: 2
I've been enjoying the 9930 as well. Was a big surprise coming from the old Bold. Night and Day difference. The touch screen combo with the always good BlackBerry keyboard is perfect.

Been trying to get a Playbook since the 16GB one dropped to $199. Can't find it anywhere. Sold out online and in every store in my city. They need to put production of the 16GB into overdrive.

Too little, too late
By Motoman on 12/2/2011 10:15:46 AM , Rating: 2
RIM has already lost. I honestly don't see any way that they're going to ever stage a comeback. They're going to quickly become like Lava soap...still on the shelf at the store, but just barely enough to say "they're alive."

My prediction is that the Kindle Fire is going to be the tablet to trample the market. $200 price point is probably still a bit on the high side for a tablet, considering the comparison to a $250 laptop for all uses except just a few...but it's definitely a price point that's going to support mass adoption - especially for a tablet that, like the Fire, isn't just a book reader.

Apple doesn't need to worry about RIM. And when Windows tablets start proliferating at $400 or more, Apple probably doesn't have to worry about them either. The Fire, at $200, is the one to worry about.

RE: Too little, too late
By robinthakur on 12/5/2011 6:44:30 AM , Rating: 2
I agree with you for once. RIM's presence in the tablet market is unlikely to be successful. I would never be surprised if they pulled an HP and EOL'd the product, it is surely what their shareholders are screaming for if they get many more quarters like this one. Without the Apps (especially some crucial core apps like an integrated mail client) it's not going to be a success. Period. This was true even before the Kindle Fire came on the market, but even more so now.

Apple are shooting for a different market as a laptop replacement, pointing out the fact that there are many desktop apps like Numbers, Pages etc. specifically made to make the iPad as a standalone device a decent option for users and enterprise which is working (my company rolled out iPads to staff who want them) whereas it's a stretch to see them doing that with Kindle Fires at present. LImiting the Fire as a media device might well work quite well for Amazon though and put them on a level footing with iTunes+iPhone/Pod/Pad. I also think that consumers will be quite wary though of new entrants to the marketplace since the HP fiasco, and the fact that nobody apart from Apple has been succesful thus far, even at this impulse-buy pricepoint, it could still crash and burn. It's also the very first revision and yearly updates are likely, but then that's no different to the iPad at this stage.

The funny part is...
By retrospooty on 12/2/2011 9:53:06 PM , Rating: 2
"RIM today announced that it would not hit its projected third-quarter revenue estimate of $5.3-$5.6 billion ........... forecasting an even weaker Q4 compared to Q3, "due to several factors including lower than expected sell-through in the third quarter and RIM’s current view of fourth quarter demand."

Even with all that, newswise, this has been the best month RIM has had in a long time. It used to be 2-3, sometimes 4 separate pieces of bad news every week for RIM. This is the first really bad one in like a month. I bet Tweedle Dee and Tweedle Dum (Balsilie and Lazardis) are celebrating tonight!

Now we can all just count the months until they are forced to sell it all off. By the time these dullards get QNX in release shape IOS6 and Android 5 will be all anyone wants.

By fteoath64 on 12/3/2011 6:24:58 AM , Rating: 2
RIM has the bad luck to hit the TouchPad $99 firesale, then got caught with the B&N Tablet and Amazon Fire releases, so very bad timing for them. Had they released the tablet at $350 initially, they would have done well.

Besides,PlayBook is not running Android so it is also a disadvantage feature.

I see dead companies
By CityZen on 12/3/2011 11:53:43 PM , Rating: 2
Someone please tell RIM that they're already dead. They're still acting as if they hadn't noticed.

"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
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