RIM Comes To Terms With PlayBook Failure

RIM's PlayBook hasn't been as successful as the company expected and unsold stocks are proving somewhat costly. The group has announced that it will have to allocate around half a billion dollars to cover losses.

This comes as no surprise. The nice BlackBerry PlayBook interface and successive price cuts (down to USD 199) haven't brought in the number of customers expected by RIM. The tablet, launched on a market largely dominated by Apple (11 million iPads sold in the last quarter) and the multitude of Android competitors - the favourite among applications developers -, suffers from several faults (requirement to be equipped with a BlackBerry to access your emails for example) which have held it back.

Although 500,000 PlayBook's were sold during the first quarter after release, in the third quarter of 2011 only 250,000 tablets shipped and in the last quarter only 150,000.

V2 in 2012

Faced with this failure, RIM is going to have to put its hand in its pocket to the tune of USD 485 million to cover its losses.

Of course, the PlayBook failure is having an impact on quarterly figures and RIM has been revising its forecasts downwards in the hope of better days in 2012. Nevertheless, RIM won't be leaving the tablet market beaten.

Next year (at the beginning of the year if all goes well), a software update should resolve some of the platform issues and imperfections. This second version will also support part of the Android catalogue.

One piece of bad news is often followed by another and RIM has also had to find USD 50 million to absorb the losses related to the worldwide breakdown in services that it suffered in October. Thankfully, the company's cash flow is solid.

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