RIM’s PlayBook: Victim of Unfortunate Timing?

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Blackberry PlayBook

No one is going to contest that Research in Motion has had more then it’s share of woes recently, and certainly they are far from over.  And then if their October extended service outage wasn’t enough to infuriate a more then a few customers, likely the drunken inexcusable behavior of a couple of executives that grounded an Air Canada flight from Toronto to Beijing will add a few more.  Then we have the BlackBerry officials in Indonesia who could face charges related to a stampede over a sale.  Then today a National Bank Financial analyst cut his target price on RIM shares to just $10 — a horrific outlook for a company whose shares where over $70 in February.  Also today a group of computer hackers announced they have “jail-broken” the PlayBook tablet, gaining root access to operating system files, which is raising questions about the security of the very devices it’s pitching to corporate and government clients.  And to throw a little more fuel on the fire, the company has announced it no longer expects to meet its full-year earnings forecast, bringing us to our topic of conversation: The write down on inventories of the PlayBook tablet.

Most folks speculated that it was the lack of PlayBook sales that caused RIM to announced it was slashing the prices.  Some figured the lack of sales were due to high cost, but now speculation is that it is actually because of the release of the Amazon Fire, which is around $300 cheaper than the basic PlayBook.  Analyst Shaw Wu has been quoted saying “Our understanding is that RIM was blindsided by Amazon pricing its Kindle Fire aggressively at $199.”  Amazon is reportedly loosing money on every Amazon Fire they sell; however, RIM’s price cuts mean that it too is losing between $50 to $75 for every PlayBook sold, begging the question: Is RIM’s PlayBook a great product that is simply a victim of unfortunate timing?

Despite the fact that the PlayBook is beginning to look like the worst and most expensive decision that RIM has ever made, from a consumer standpoint, the answer is yes – it’s a great buy.  There is incredible value in this great device, which right now is without doubt a deal to be had.  From a corporate standpoint, the answer is no.  This latest $485 million writeoff in value means that the PlayBook, which has generated at absolute most 2% of RIM’s revenue, has swallowed up $1.5 billion of cash and forced it into straitened circumstances.  But if you are a tablet fan, or a Blackberry fan, then Christmas came early!  RIM is have a holiday fire sale, and has slashed PlayBook prices by $300 across the board (for a limited time, the tablet starts at $200 for the 16GB version).  But now RIM employees are getting an even better deal: $99 for the 16GB, $150 for the 32GB and $200 for the 64GB.  Suddenly the tablet is now hard to keep on the shelves.  Best Buy sold out on Monday, and we expect more shortages could easily follow – the same thing happened earlier this year with HP’s TouchPad.  If it keeps up, RIM’s employees will have the only tablets left!  More then likely a lot of employee’s will be trading their employee-discounted RIM PlayBook for a Christmas bonus courtesy of eBay.  Keep your eyes peeled, there are deals to be had on RIM’s tablet, and at these prices you won’t be disappointed.


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  1. Dave Williams  December 7, 2011

    So from a functionality standpoint is this a better product than Amazon’s tab? Like in a side by side comparison are the specifications better?

    • Mel  December 8, 2011

      If a million games and apps aren’t important to you, the Playbook is a great tablet. I bought mine to be a media player, e-book reader and internet browser and it does a great job.. It’s smaller and lighter than my netbook and I love connecting it to my new TV and streaming tv from the internet. It’s a real bargain price.

  2. Anthony  December 8, 2011

    ‘Dismal Sales for Playbook’. Confusing as the last I checked there is no stock available for sale for this fantastic tablet. Sought of contradicts, isn’t it. I wonder why even when RIM sneezes it makes headlines, such as the drunk employees of RIM. Are we saying that no employee of any other company does any wrong. It sucks that the attitude is kick further when the person is down. RIM is struggling and it is not a secret but the way the Star and other news media outlets are exploiting the situation is really disgraceful.


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