RIM loses half a billion dollars due to unsold and discounted PlayBooks

By Jeffrey Van Camp December 2, 2011

blackberry-bbx-playbook-630

It’s sometimes good to bet big, but it’s never fun to lose big. Research in Motion has lost almost half a billion dollars in the three-month period that just ended on Nov. 26 (Q3 2011), posting a pre-tax write off of $485 million due to unsold and discounted BlackBerry PlayBook tablets, reports the AP. The PlayBook, which launched in April, never took off at its $500 price point and had to be discounted to $300 and now $200 over Thanksgiving weekend. Though the steep discount has led to a sales surge, RIM is now losing a hefty amount on every tablet it sells.

As for sales, RIM said that it shipped 150,000 PlayBooks to stores in Q3, but sold slightly more, indicating that there were unsold PlayBooks at some retailers. BlackBerry smartphones continue to sell, however. RIM moved 14.1 million BlackBerry phones during hte quarter. The big BlackBerry outage in October, which took down service for customers all across the globe, has cost the company $50 million so far.

So the PlayBook is finally selling, but RIM is paying dearly to make it happen. Will this keep the tablet alive long enough for RIM’s promised BlackBerry Tablet OS version 2.0 to come out in February, even with fierce competition from the Amazon Kindle Fire and Nook Tablet? If you’ve bought a PlayBook recently, let us know what you think of it and if you’re actually using it regularly.

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Jeffrey Van Camp

Former Digital Trends Contributor

As DT's Deputy Editor, Jeff helps oversee editorial operations at Digital Trends. Previously, he ran the site's…

Mobile

Bye bye BBX – RIM dumps name of next OS after court ruling

The year 2011 will undoubtedly be one that Research In Motion (RIM) will be glad to see the back of. Today the Ontario-based company suffered yet another setback, this time over the use of the name of its next mobile operating system, which was to be called BBX.
A federal court in Albuquerque on Tuesday granted a temporary restraining order against RIM using BBX to describe its new software. However, soon after the order was granted, RIM announced on its Twitter feed that its forthcoming operating system would now be called BlackBerry 10.
The court ruling was the result of a trademark dispute with Albuquerque-based software company Basis International, which is already using the BBX name for its own software product.
The BlackBerry and PlayBook maker would have used the BBX name at its Asia DevCon conference in Singapore later this week, but the court decision meant it would no longer be able to do so. In a statement, Basis said it had asked RIM not to use the BBX name at the conference, but RIM had refused to comply. As a result, Basis felt it had no choice but to file for the court order.
RIM’s new BBX BlackBerry 10 operating system, which is supposed to be rolled out for all of its mobile devices early next year, will reportedly bring together the best of its two existing operating systems - BlackBerry OS (used to power its smartphones) and QNX (used to power its PlayBook tablet).
It’s been a dire 12 months for RIM. Its attempt at producing an iPad killer with the PlayBook has been nothing short of a disaster, with the company losing half a billion dollars in the last three months thanks to unsold and discounted tablets.
In October a three-day service outage affected millions of BlackBerry users around the world, while shares in the company have fallen by around 65 percent over the course of 2011.
Next year will be crucial for RIM with the company desperately hoping BlackBerry 10 will turn things around for it.

Mobile

RIM debuts enterprise security system for iPhone, Android

research-in-motion

Beggars cannot be choosers, it seems. Once the singular darling of the enterprise market, Research In Motion has resorted to creating proprietary security system for the iPhone and Android handsets, which have rapidly begun to replace the BlackBerry as the serious smartphone of choice. The Web-based system, named Mobile Fusion, will be available in late March of next year, according to the official announcement. In short, Mobile Fusion will bring BlackBerry-level security to other brands of smartphones. This has become a necessity of the enterprise market, which has begun allowing (read: requiring) employees to use their personal handsets for work purposes, as a way to cut costs. Mobile Fusion is not simply an app. Instead, the software will be based entirely on RIM's BlackBerry Enterprise servers, which until now have been used exclusively to support its BlackBerry devices. Mobile Fusion will allow IT departments to perform remote wipe, remote lock and other intrusive functions on devices connected to the system. "What our enterprise customers are looking for, and the opportunity for us, is to become the de facto platform," said Alan Panezic, vice president of enterprise product management, in an interview with Reuters. "We will take full advantage of whatever security capabilities are provided by the core operating system. We're not going to hold that back in any way, shape or form."That said, RIM points out in the Mobile Fusion press release that "Device security, manageability and controls will continue to vary according to the inherent capabilities of the individual device operating systems," which means there's still some work to do before Mobile Fusion will provide the same level of security as an actual BlackBerry.

Mobile

RIM downgraded as $200 PlayBook vanishes

BlackBerry PlayBook

Last week, Canada's Research in Motion cut the price on its low-end PlayBook tablet to just $200 for a limited time in an effort to woo Thanksgiving holiday shoppers to the device just as competitors like the Barnes & Noble Nook tablet and Kindle Fire went on sale. However, just as quickly as the $200 PlayBook appeared, it seems to be vanishing: retailers appear to be in the process of removing the $200 PlayBook devices from their online catalogs, and some Best Buy customers have reported their orders for the $200 tablets have been cancelled.
Complaints in Best Buy customer forums were first reported by Electronista. Quick checks of other retailers that had previously been offering the $200 tablets (Staples, Office Depot, Walmart, and RadioShack) finds the only $200 tablets listed as available are refurbished models.
The move could indicate that RIM's idea of "a limited time only" was indeed just a period of a few days surrounding the Thanksgiving holiday, or that the $200 promotional price proved popular with consumers, even as the Kindle Fire hit the streets. If recent history is any judge, consumers can go a little crazy for heavily discounted tablets—even if the future of the platform is in doubt.
In the meantime, RIM is facing continued doubt about its future: Sterne Agee analyst Shaw Wu has lowered his rating on RIM shares from "buy" to "neutral" and suspended his $31 target price for the company's stock. He notes the company is facing serious competition from the likes of Samsung, Apple, Amazon, and HTC, and that significant service outages in October have damaged RIM with its bread-and-butter enterprise and government customers.
Wu took his critique a step further, saying he should have downgraded RIM's stock back in October when it was trading for $24 a share. RIM's stock price closed last week at $16. However, Wu did note that RIM has "intrinsic value," including a large patent portfolio and 70 million subscribers, and declined to downgrade the stock to "underperform."