RIM dug a $485 Million hole with the BlackBerry PlayBook in Q3 of 2011
Posted on 02. Dec, 2011 by Paul in Tablets
RIM's Mike Lazaridis unveiling the Blackberry PlayBook in late 2010. Image: Reuters
Everybody knew that Canada’s Research In Motion (RIM) had dug themselves a nice sized hole during the third quarter in respect to their tablet business, but a report by The Wall Street Journal today confirmed just how bad the PlayBook was for RIM’s finances.
According to the WSJ report, which cites info received directly from RIM, the 7-inch BlackBerry PlayBook cost RIM $485 million during the fiscal third quarter. Apparently RIM only shipped 150,000 PlayBook tablets during the third quarter, that’s down from 200,000 PlayBook tablets shipped in previous quarter.
The loss isn’t anything compared to the $3.3 billion that Hewlett-Packard (HP) flushed down the toilet with their weak attempt at pushing webOS on consumers in 2011. However RIM’s hole could have gotten deeper in the fourth quarter if the company didn’t do something really drastic to clear all of the warehouses around the globe that might have BlackBerry PlayBook tablets stored inside.
What’s that drastic move the RIM made? Holiday discounts on all of the BlackBerry PlayBook models to the tune of $300 off the MSRP. For the past few weeks (and ending on December 3rd, according to RIM) shoppers could purchase a BlackBerry PlayBook for as little as $199 through select retailers or through RIM’s own BlackBerry online store.
RIM will still lose money on each sale, but at least RIM will be moving PlayBook tablets that have clogged up retail channels for months and the company will be getting some sort of revenue from the failed tablet at the same time.
RIM is still profitable…
In the WSJ report it was also revealed that RIM has reduced their estimated earnings for the year, and they even admitted that BlackBerry shipments would be down for the year. However through it all RIM is still profitable and the company is “sitting on a large cash pile”, according WSJ.
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