10 ms·

RIM Takes $485M Hit Over Unsold PlayBook Tablets

41 points by gaoprea 15y ago

plusbryan 15y 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.
- deleted 15y ago
  [deleted]
- kin 15y 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 15y ago
Lower the price by 40% and all the problems will be resolved.
- eli 15y ago
  I'm pretty sure that only solves one of the problems, actually.
clojurerocks 15y ago
Ya lower prices. Make it like 99 dollars or something and it will sell like hotcakes. Or hell even cheaper.
- Samuel_Michon 15y 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.
lambersley 15y 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).
troymc 15y 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.
- sjs 15y ago
  A playbook is a book of strategies used by sports coaches. Typically in US football.
  - troymc 15y ago
    I'm not sure how that interpretation of "playbook" helps the marketing. Are they targeting enterprise, general consumers, or US football coaches?
    - abrowne 15y ago
      Not that I necessarily think it was a great naming decision, but in North America the football coach "playbook" is commonly used in business strategy metaphors. (Search for something like "page out of apple's playbook".)
  - Argorak 15y 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.
    - sjs 15y ago
      Fair enough, just providing some context.
protomyth 15y 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 15y 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.
  - astrodust 15y 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 15y 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 15y 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.
- astrodust 15y 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.
raganwald 15y ago
Amateur hour really is over: http://blogs-images.forbes.com/marcwebertobias/files/2011/05/playbook_4_400.jpg 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 15y 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 15y 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.
shin_lao 15y 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.
- qdog 15y 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?
  - marekmroz 15y 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.
    - qdog 15y ago
      Right, knowing how it works it's probably easy enough, but the short time I looked at it, there were no instructions. My point was it seemed unlikely to attract buyers easily who are browsing all the tablets at the Best Buy like I was. Perhaps I am biased, I have an old HP 48GX programmable calculator, learning to use it required a fair amount of work, but that was expected. For a tablet I expect to be able to use it pretty easily by picking it up. I can certainly listen to why you like the playbook, but the 2 minutes my wife played with an ipad2 she was already adding calendar events and playing with the book app. I don't particularly care for Apple the company, but the 2 minutes hands-on examination heavily favored the ipad2 for what I would call the average user. The Android ui also seemed pretty intuitive, but maybe I'll re-examine the Playbook in more depth.
matwood 15y 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.
- nobody314159265 15y ago
  Guess which division has the CEO's ear! It's like having an online Office suite that will only work from computers running your company's desktop OS.
marknutter 15y ago
It's called skating to where the puck was.
- martingordon 15y ago
  Ironic, considering they're a Canadian company.
iamandrus 15y 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 15y 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 15y 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.
parfe 15y 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 15y 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.
- zmonkeyz 15y 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.
  - parfe 15y ago
    >Spoken like someone who doesnt use one. Obviously I don't use one. No one uses one.
rbanffy 15y ago
I'd buy one for US$ 50, tops. ;-)

41 points by gaoprea 15y 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.

deleted 15y ago
[deleted]
kin 15y 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 15y ago

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

eli 15y ago
I'm pretty sure that only solves one of the problems, actually.

clojurerocks 15y ago

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

Samuel_Michon 15y 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.

lambersley 15y 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).

troymc 15y 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.

sjs 15y ago
A playbook is a book of strategies used by sports coaches. Typically in US football.
- troymc 15y ago
  I'm not sure how that interpretation of "playbook" helps the marketing. Are they targeting enterprise, general consumers, or US football coaches?
  - abrowne 15y ago
    Not that I necessarily think it was a great naming decision, but in North America the football coach "playbook" is commonly used in business strategy metaphors. (Search for something like "page out of apple's playbook".)
- Argorak 15y 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.
  - sjs 15y ago
    Fair enough, just providing some context.

protomyth 15y 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 15y 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.
- astrodust 15y 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 15y 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 15y 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.
astrodust 15y 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.

raganwald 15y ago

Amateur hour really is over: http://blogs-images.forbes.com/marcwebertobias/files/2011/05/playbook_4_400.jpg 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 15y 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 15y 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.

shin_lao 15y 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.

qdog 15y 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?
- marekmroz 15y 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.
  - qdog 15y ago
    Right, knowing how it works it's probably easy enough, but the short time I looked at it, there were no instructions. My point was it seemed unlikely to attract buyers easily who are browsing all the tablets at the Best Buy like I was. Perhaps I am biased, I have an old HP 48GX programmable calculator, learning to use it required a fair amount of work, but that was expected. For a tablet I expect to be able to use it pretty easily by picking it up. I can certainly listen to why you like the playbook, but the 2 minutes my wife played with an ipad2 she was already adding calendar events and playing with the book app. I don't particularly care for Apple the company, but the 2 minutes hands-on examination heavily favored the ipad2 for what I would call the average user. The Android ui also seemed pretty intuitive, but maybe I'll re-examine the Playbook in more depth.

matwood 15y 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.

nobody314159265 15y ago
Guess which division has the CEO's ear! It's like having an online Office suite that will only work from computers running your company's desktop OS.

marknutter 15y ago

It's called skating to where the puck was.

martingordon 15y ago
Ironic, considering they're a Canadian company.

iamandrus 15y 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 15y 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 15y 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.

parfe 15y 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 15y 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.
zmonkeyz 15y 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.
- parfe 15y ago
  >Spoken like someone who doesnt use one. Obviously I don't use one. No one uses one.

rbanffy 15y ago

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