RIM Swallows $485m Q3 Hit Over Unsold PlayBooks

RIM will take a $485m hit for its stockpiled BlackBerry PlayBook mountain, the company has announced, though insists it is still "committed" to the 7-inch tablet and its believe that "the tablet market is still in its infancy." The Canadian company recently slashed the entry-level PlayBook to sub-$200 and it looks like such discounting is likely to stick around; RIM "now believes that an increase in promotional activity is required to drive sell-through to end customers" and claims that the cut-price QNX slate saw significantly increased demand.

Nonetheless, while some retailers apparently cancelled recent orders, blaming stock shortages after buyers flocked to the cheaper tablet, RIM says it still has a significant number left over. It blames the increasingly competitive tablet ecosystem, as well as delays pushing PlayBook OS 2.0 back to February 2012, along with features like native email support.

"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. 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" Mike Lazaridis, Co-CEO, RIM

Still, the company says that its retail partners sold more than the 150,000 PlayBook units RIM shipped out in Q3, which means they too might be finally clearing some of their unsold stock from earlier in the year. The majority of RIM's $485m hit to clear out the PlayBook stock will be non-cash.