RIM Takes $485M Hit Over Unsold PlayBook Tablets

http://www.pcmag.com/article2/0,2817,2397150,00.asp

by gaoprea • 15 years ago

41 55 15 years ago

pcmag.com

plusbryan• 15 years ago

"Despite its troubles, the PlayBook is not going anywhere, RIM said."

If that's a direct quote, it's an unfortunate choice of words.

kin• 15 years ago

Their CEO always says shit like this. It bottles my mind how much the CEO believes in his products. IMO he's too optimistic and quite frankly needs a hard smack of reality. That or he's just trying to keep investors at bay.

CMT• 15 years ago

Lower the price by 40% and all the problems will be resolved.

eli• 15 years ago

I'm pretty sure that only solves one of the problems, actually.

clojurerocks• 15 years ago

Ya lower prices. Make it like 99 dollars or something and it will sell like hotcakes. Or hell even cheaper.

Samuel_Michon• 15 years ago

It "worked" for HP's TouchPad. They lost $500 on every device, but at least they finally sold those tablets.

So how about giving those PlayBooks away with a box of Cracker Jack's? There must be some kids who want a tablet that can't send email and doesn't have any games.

lambersley2• 15 years ago

RIM's primary distribution channel is now proving to be more a barrier than once thought. The sell-through approach using the Carriers as primary is horrible. Carriers will promote and sell what is profitable and buzzing. In recent weeks RIM has alllowed employees to purchase Playbook internally at a discounted price (discount becomes taxable income). I know employees who have purchased upwards of 20 devices for friends and families. It makes me wonder, what if they were to open this up for all their devices? What if they'd done this 3 years ago? Sure it would eat into their profit margins but it would definitely increase market share and create stickiness (aka Crackberry).

troymc3• 15 years ago

"...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."

The device is named a "PlayBook" yet they're targeting the enterprise market. That seems wrong. Did they start by targeting general consumers then shift their target market without changing the device's name?

At least RIM is sticking to their guns and forging ahead with the device, unlike the wishy-washy maybe-we-will-maybe-we-won't emanating from HP regarding webOS.

sjs2• 15 years ago

A playbook is a book of strategies used by sports coaches. Typically in US football.

troymc3• 15 years ago

I'm not sure how that interpretation of "playbook" helps the marketing. Are they targeting enterprise, general consumers, or US football coaches?

Argorak• 15 years ago

This is nice - if you know the meaning behind the term. But RIM is an international company, so not all of their costumers know this all to well.

I as a non-native speaker was definitely not aware of the term, so my first association was "play" - I am sure there are many more like me. This is definitely an unfortunate choice of a brand name.

lambersley2• 15 years ago

RIM's devices always had the enterprise, work-only feel to them. They'd already cornered the market as THE CORPORATE device, so it was time to target the consumer (late to the party). They wanted to create an enterprise class device that consumers would also enjoy 'playing' with. Work first, play later.

protomyth2• 15 years ago

Given the people who bought Blackberries, it would seem like an ARM-based netbook with a really awesome keyboard and 3G would have been a better idea for a first step outside the cellphone market. It really seems like the Storm and Playbook were me-toos instead of looking at what makes RIM great and pushing that.

masklinn• 15 years ago

> Given the people who bought Blackberries

Depends on the country, Blackberries are mostly (to solely) corporate in the US, but in Europe it tends to be used a lot by teenagers and young adults for extensive messaging thanks to BBM + good keyboard.

On the other hand, I don't see how they'd get that demographic a BB tablet, so you probably have a good point.

astrodust2• 15 years ago

Their new market is heavy texters. Corporate US has all but given up on the platform, with an avalanche of switching to Android and iOS.

If you want a cheap phone with an inexpensive text-messaging plan, RIM is your go-to device.

Qz• 15 years ago

but in Europe it tends to be used a lot by teenagers and young adults for extensive messaging thanks to BBM + good keyboard.

Actually the same is true in the US for people who want cheap plans.

calloc• 15 years ago

A lot of companies that are still using blackberries are eyeing alternatives that they want to start using once their contracts run out. Several smaller companies I have spoke to used to be entirely Blackberry shops, but have recently switched to iPhone's and Android devices.

astrodust2• 15 years ago

People buy the RIM devices for their keyboards. To go and make a touchscreen tablet without one is misguided and blind to their customers.

That being said, the utility of a keyboarded-tablet is somewhat dubious at best. It'd feel like a hobbled netbook.

protomyth2• 15 years ago

That's pretty much why I said make a real netbook. QNX would have made an interesting OS for a netbook. If they were going to go along with the crowd, they should have copied the Air instead of the iPad.

raganwald2• 15 years ago

Amateur hour really is over:

http://blogs-images.forbes.com/marcwebertobias/files/2011/05...

Amateurs could not possibly lose a half a billion dollars competing head-on with a juggernaut and ignoring the obvious time and time again.

UPDATE: Enough snark. Here’s my post-moretm: They drank their own kool-aid. Every single thing about it strikes me as the work of a team trying to sell to their management rather than to the market. Or, the work of a team that was only allowed to build what their management wanted to succeed rather than what the market would reward with success.

Their advertising brags and boast of how awesome it is, but nobody who actually talks to customers would believe that this is true or believable. Management, on the other hand, might believe it is awesome if they were reading the ad copy while looking at some incomprehensible PowerPoint with fancy graphics.

Their choice of technologies and features hits the sweet spot of what the company is prepared to fund rather than what customers are prepared to buy.

The whole thing seems inward-facing, a little like certain start-ups that are buzzword compliant because that’s what VCs want to fund rather than because that’s what markets want to buy.

nextparadigms• 15 years ago

I agree on the drank their own Kool-aid thing. I have a friend at RIM and I've been trying to tell her RIM is in danger since 2009. But back then RIM was still breaking their own revenue records every quarter, but that was obviously a matter of inertia Internationally that they've got because of their years of popularity in US. But they should've seen that that advantage will only be temporary, unless they release some products that can really compete with the iPhone and Android phones.

But they never did. Even in early 2010 (before their sales started crashing down) RIM was pretty much "worry-free" according to my friend working there. This was clearly a matter of vision and leadership failure.

jeremymcanally• 15 years ago

100% spot on (from the outside, at least).

I think they were banking on their "huge market share" in mobile phones (that has since began sinking down) to get buy in. "Oh I have a Blackberry I should buy this thing." That's a good market to shoot for if there's a compelling reason for the customer to do that, but I didn't see a single feature that would really push someone to buy a Playbook over an iPad even as an existing RIM customer.

function_seven• 15 years ago

> but I didn't see a single feature that would really push someone to buy a Playbook over an iPad even as an existing RIM customer.

It's even worse than that. The useless thing couldn't do email. You know, the one thing that made RIM a success in the first place? Yeah.

rbanffy2• 15 years ago

There aren't many things more dangerous than surrounding oneself with yes-men. It's amazing people fall for it so frequently.

raganwald2• 15 years ago

On a very serious note, what else do companies expect when they make “fitting in with our culture” a key part of the hiring and evaluation process?

shin_lao• 15 years ago

I own a Playbook and it's really, really a nice device. It's fast, browsing is convenient, it can multi tasks, the form factor is better than the iPad and it can be used as a mass storage on my PC. I've played with the iPad, the iPad2 and the Samsung Galaxy but I prefer the PlayBook.

The big problem: no apps.

qdog2• 15 years ago

Browsing at the store, the playbook didn't seem as responsive or the UI very intuitive. Just getting back out of an app seemed like a chore. In fact, I'd say it seemed to be the hardest ui to navigate of any of the tablets I looked at.

So maybe owning it and getting used to it takes some time, but it would take a lot of convincing for me to think about buying one after the quick store browsing. Most of the people around me didn't seem very interested in it, either.

Does it have a kindle app?

marekmroz2• 15 years ago

> Just getting back out of an app seemed like a chore. In fact, I'd say it seemed to be the hardest ui to navigate of any of the tablets I looked at.

Swipe up from the bottom edge of the bezel to get to home screen. How is that hard? Personally I really like how PlayBook uses the bezel for UI.

>Does it have a kindle app?

Not that I know, it has a Kobo app. No side-loading though.

troymc3• 15 years ago

I heard that Unity (the game SDK) and Marmalade SDK can now be used to create apps for the PlayBook (as well as iOS, Android, etc.)

Developers who use those SDK's might make a PlayBook version just so they can be the "only fish in the pond" (unlike other app stores, where it's easy to get lost among the zillions of other apps).

smilliken• 15 years ago

It really is a nice device, I was pleasantly surprised since I was expecting something closer to a BlackBerry. If I didn't already have a tablet I'd strongly consider the PlayBook.

bishnu2• 15 years ago

I agree. I gave it a 20 minute test drive at Best Buy alongside TouchPads and Samsung Galaxy Tabs and it blew them out of the water, the only thing I've seen so far that felt close to an iPad in terms of useability and overall design. What's there is very good.

But it's pricey, there's no apps, it's missing key functionality, and RIM execs have their head up their own ass.

bryanlarsen• 15 years ago

$200 is pricy?

benwerd• 15 years ago

I've got a Playbook, and I completely disagree with you.

The lack of apps is a symptom, not a problem. The development environment is very poor, the app store itself is slow and badly designed, and it's missing important glue like Android's killer universal share screen.

They didn't want to cannibalize their phones, and missed the fact that their phones are going away - and that phones, computers, tablets are turning into a spectrum of connected devices that are expected to do more or less the same things but in different form factors appropriate to different contexts.

The hardware itself is pretty awesome, so that's not at fault. And there are neat UI touches like the active borders. But overall, it's just a terrible operating system, and they didn't have a clue what it takes to create a developer ecosystem. Even the apps they do have feel like cheap knock-offs. Have you played Angry Apes?!

It's no wonder that RIM's now talking about pushing its enterprise lock-down functionality - its only real selling point at this stage - to iPhones and Android devices.

foobarbazetc• 15 years ago

RIM will never win, because they're developer hostile.

The developer environment sucks, the APIs have always sucked, the signing system has always sucked.

Keep in mind that until very recently, the BlackBerry OS had no way for you to execute a HTTP request without implementing your own logic about which of the 500 different esoteric connectivity options you wanted to use. It's just a clusterf*ck.

zmonkeyz2• 15 years ago

I agree. While the lack of apps is an issue the tablet itself is fantastic. This is coming from someone who never used a Blackberry.

matwood• 15 years ago

Isn't it the Playbook that still can't check email, contacts, or a calendar without being tethered to a Blackberry? I could have told you day one that was going fail, doubly so if they were expecting their main customers to be enterprises. "Hold on, let me plug my phone into my tablet to check my schedule...wait, why do I have this tablet again?"

Hopefully they dump their CEO(s) and get someone who understands the current and rapidly changing mobile and tablet markets. If not, RIMs days are numbered.

marknutter• 15 years ago

It's called skating to where the puck was.

martingordon• 15 years ago

Ironic, considering they're a Canadian company.

iamandrus• 15 years ago

They have nobody to blame but themselves. They shipped the tablet too early and without fully finishing it. Why should I need to own a BlackBerry in order to utilize something as simple as email or BBM? Sure, it's a tablet that's meant to be integrated with your smartphone but I should be able to buy it as a standalone product as well. The only thing that can save them now is to abandon the PlayBook and do a completely new tablet that can actually gain tablet market share.

daimyoyo• 15 years ago

Given RIM's atrocious performance and the fact they've been hemmorhaging customers for a long while, where's the shareholder revolt? The board might not see the obvious, but surely the investors in RIM can see that when a company loses some 80% of it's value, something needs to change.

scrame• 15 years ago

A coworker had a playbook. He said he "was _not_ disappointed". The selling feature was that the OS looked like OSX, as opposed to "the usual crappy android UI".

He didn't really have an answer for why he didn't just get an iPad if he wants something like OSX on it.

parfe2• 15 years ago

Did anyone who owns an IPhone or Android smart phone decide to buy a Playbook? I still can't believe RIM insists on stick to their own OS rather than building their features onto android, joining that ecosystem, and putting out quality hardware.

untog• 15 years ago

I don't know about that. Hitching a ride onto Android is a way to immediately make yourself look like everyone else- and Android tablets do not have a fantastic reputation.

zmonkeyz2• 15 years ago

Spoken like someone who doesnt use one. The OS of the Playbook has as much in common as android does to Windows. As a tablet OS it is actually very good. Putting Android on it would be a downgrade imo.

parfe2• 15 years ago

>Spoken like someone who doesnt use one.

Obviously I don't use one. No one uses one.

rbanffy2• 15 years ago

I'd buy one for US$ 50, tops. ;-)

RIM Takes $485M Hit Over Unsold PlayBook Tablets

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