RIM to Miss Financial Targets Again, Weak PlayBook Sales to Blame
December 2, 2011 8:58 AM
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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
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."
The Globe and Mail
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Like my BB9930 and Playbook
12/2/2011 11:27:06 AM
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
12/4/2011 12:13:12 AM
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
12/5/2011 1:37:38 AM
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
12/4/2011 2:08:12 AM
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.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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