Underperforming Playbook costing RIM Half a Billion Dollars
The potential goldmine that is the tablet market is luring a lot of companies into trying out their luck with this new market niche and hoping that they can become as successful as Apple, the company that recreated this whole sector. Research in Motion (RIM) was one of the companies that thought that it can replicate its early success with its BlackBerry brand with a tablet and released the BlackBerry Playbook April of this year. Unfortunately, just like many of the other companies that dipped their toes into the tablet pool, RIM is finding out the hard way that success in the tablet market can be quite elusive.
The BlackBerry Playbook initially sold at $500 but it never gained traction in the market. Eventually, its price was lowered to $300 and then to just $199 when the Thanksgiving weekend shopping frenzy began. Unfortunately, even if sales improved with the discounted prices, the company is now bleeding money. RIM has reported that it has lost almost half a billion dollars in the third quarter of 2011. The company posted a pre-tax write off of $485 million based on its unsold and also discounted Playbook tablets. Its aggressive pricing strategy may have resulted in Playbook tablets now flying off the shelves, but it has happened at the cost of the company losing money. Techies are hoping that the financial bleed will not be too fatal and that RIM will still be able to come out with the BlackBerry Tablet OS version 2.0 that RIM promises to release on February 2012.