RIM PlayBook launch disappoints; Intel earnings soar

Posted:
in iPad edited January 2014
Research in Motion's lackluster launch of the BlackBerry PlayBook tablet spooked investors on Tuesday. Meanwhile, record earnings bolstered Intel's confidence in continued growth of the PC market, even as CEO Paul Otellini admitted that tablets like Apple's iPad had cannibalized PC sales "a little bit."



PlayBook launch



The 7-inch PlayBook, RIM's answer to Apple's iPad, launched in thousands of stores on Tuesday and "mostly stayed there," with many stores unable to sell through their stock of 5 units, Reuters reports.



According to The Wall Street Journal, several retailers saw modest sales of the device throughout Tuesday. A few stores in Toronto and New York reported that a few people had waited in line on Tuesday morning to purchase the PlayBook.



?The traffic?s not iPad crazy, but there is a buzz,? said a salesman at a Sears department store in Toronto. ?We actually had 5 people in the morning when the store opened at 7.?



Last week, advance reviews of the PlayBook criticized the device as being "unfinished" and recommended that customers hold off on purchasing until RIM adds features later this year. RIM co-CEOs Jim Balsillie and Mike Lazaridis quickly spoke out in defense of the PlayBook, calling reviewers' assessments unfair.



The PlayBook is priced to compete with the iPad. The 16GB Wi-Fi only version sells for $499, with 32GB and 64GB models going for $599 and $699 respectively. RIM has revealed that a 4G cellular data version of the PlayBook will come to the Sprint network this summer.



Analysts remain skeptical about the PlayBook's likelihood of success, with a consensus estimate of 3 million units sold in 2011. "It's going to be a tough sell to the consumer," BGC Partner analyst Colin Gillis said.



"It's not going to be in the same league as the iPad," said IDC analyst Al Hilwa. "The question is will it sell more than the [Motorola] Xoom but less than the [Samsung] Galaxy."



Shares of RIM fell 2.94 percent on Tuesday, closing at 53.22 on the Nasdaq.







The muted PlayBook launch contrasts sharply with last month's launch of the iPad 2, which drew record lines. Supply of the iPad 2 has remained scarce for over a month, though Apple was able to stick to its scheduled international launch on March 25, unlike last year with the original iPad.



On Sunday, Toys R Us and Best Buy both held promotions for the device, despite having limited stock of the tablet.



Intel earnings



Intel surprised Wall Street on Tuesday with record first quarter revenue. The chipmaker reported net income of $3.16 billion, up from $2.44 billion in the first quarter of 2010.



The company's revenue soared to $12.85 billion on 25 percent growth, besting consensus estimates of $10.8 billion to $11.6 billion.



During a conference call to discuss the earnings, Intel CEO Paul Otellini admitted that, as expected, consumer demand in the U.S. and Western Europe had been "soft," but noted that emerging markets and enterprise servers had outperformed expectations, according to Seeking Alpha.



Several of Intel's businesses, including Data Center, Embedded and the Digital Home Group posted impressive growth for the quarter. The Data Center Group recorded revenue of $2.5 billion in the first quarter of 2011, with 32 percent growth year over year.



Intel reported "outstanding" demand for its new line of Sandy Bridge chips. Apple added Sandy Bridge Core i5 and i7 CPUs to its MacBook Pro line of laptops in February. NPD estimates that the new MacBook Pros contributed to 47 percent growth in U.S. Mac sales in March.



Otellini remained optimistic about Oak Trail, the company's just launched tablet chip. "Over the course of this year, Intel will have tablet platforms that run Windows, Android and MeeGo," said Otellini.



"We're heads down on a number of designs on tablets on all three of those operating systems," adding that Intel had obtained the Android 3.0 Honeycomb source code from Google and was working on porting it to work with Intel's chips.



Intel also reiterated its commitment to a smartphone chip solution. Otellini said last December that "premier branded" smartphones sporting Intel's chips are scheduled to arrive in the "second half of 2011."



During the call, Otellini took issue with PC growth forecasts from firms like IDC and Gartner, calling them "all over the map."



Otellini sees "low-double digit" growth for the PC market in 2011, compared to Gartner's forecast of 11 percent and IDC's estimate of 6 percent or 7 percent.



When asked whether tablets such as the iPad had softened demand for PCs last quarter, Otellini admitted that tablets had cannibalized PC sales "a little bit," while pointing out that macroeconomics and the post-recession upgrade cycle are bigger causes.



Shares of Intel jumped close to 5 percent in after-hours trading late Tuesday.
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Comments

  • magicjmagicj Posts: 406member
    RIM's launch can only be a disappointment if you actually expected them to sell any of those things.
  • dick applebaumdick applebaum Posts: 11,307member
    Somewhere I read that the co-CEOs are referred to as "lazy" and "silly" ...



    Maybe more apropos would be "crazy" and "ballsy"
  • radjinradjin Posts: 165member
    Quote:
    Originally Posted by AppleInsider View Post


    The PlayBook is priced to compete with the iPad. The 16GB Wi-Fi only version sells for $499, with 32GB and 64GB models going for $599 and $699 respectively. RIM has revealed that a 4G cellular data version of the PlayBook will come to the Sprint network this summer.



    Priced to compete how? Like Prunes to Watermelons. The PlayBook is an oversized PDA. Priced to compete would be less then half the price for less then half the functionality and size.
  • mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by AppleInsider View Post


    "We're heads down on a number of designs on tablets on all three of those operating systems," adding that Intel had obtained the Android 3.0 Honeycomb source code from Google and was working on porting it to work with Intel's chips.



    I read somewhere today that Google has halted the honeycomb update to Samsung. I wonder what version Intel has, but something is up with Android, so we will see. I'm not sure what it feels like to step in front of freight train of iPads going full speed, but apparently Intel wants to find out.
  • solipsismsolipsism Posts: 25,726member
    Go Intel. Even with their market dominance and ARM pulling many pricy tech purchases they are still killing it. That said, I do hope AMD will become a more dominate player.
  • kdjohn3kdjohn3 Posts: 24member
    Quote:
    Originally Posted by AppleInsider View Post


    Analysts remain skeptical about the PlayBook's likelihood of success, with a consensus estimate of 3 million units sold in 2011.



    I'll be shocked if they sell more than a few hundred thousand. I'll eat a dog turd if they sell 3 million.
  • jd_in_sbjd_in_sb Posts: 1,268member
    Competitors to iPhone are typically dirt cheap, or sometimes free. This is part of the reason for the success of Android. Competitors to the iPad are costing $500-$800. There is no way to use price to gain competing tablet customers. They don't have a chance.
  • jacksonsjacksons Posts: 244member
    Quote:
    Originally Posted by kdjohn3 View Post


    I'll be shocked if they sell more than a few hundred thousand. I'll eat a dog turd if they sell 3 million.



    Be sure to post the video.
  • futuristicfuturistic Posts: 599member
    Quote:
    Originally Posted by AppleInsider View Post


    ?The traffic?s not iPad crazy, but there is a buzz,? said a salesman at a Sears department store in Toronto. ?We actually had 5 people in the morning when the store opened at 7.?



    Five people isn't a buzz, it's a smoke break.
  • solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by kdjohn3 View Post


    I'll be shocked if they sell more than a few hundred thousand. I'll eat a dog turd if they sell 3 million.



    Which ?dog turd? will you eat: Samsung Tab, Moto Xoom, or RiM PlayBook?
  • bedouinbedouin Posts: 325member
    Why can't these companies just not rush to get a product out and instead focus on making a really awesome one, even if there is a two year wait?



    It's like -- I'm not inherently against the competition, but everyone comes to the party saying, "Me too!" instead of, "Look at what I've accomplished . . . "
  • addicted44addicted44 Posts: 811member
    Quote:
    Originally Posted by solipsism View Post


    Which ?dog turd? will you eat: Samsung Tab, Moto Xoom, or RiM PlayBook?



    ...and pay more to enjoy...



    I find the intel comments combined with the gartner report really interesting. Gartner claimed that the pc market shrunk, yet intel claims sandy bridge did really well. I see 2 possibilities here (aside from gartner being wrong or intel being creative with phrasing)

    1) gartner is talking only about the us, and international growth has more than made up for us drops. I dontfind this likely because drop in computer sales in Europe and Japan is probably more pronounced than in the us, and while india, china and brazil have certainly grown, I think it's unlikely it makes up for the loss in the biggest current economies, especially since pc sales in the emerging economies tend to be at the lower end.

    2) apples growth has shifted a lot of intels chip sales from the lower end chips to higher end chips. If apple ha bee a driver of. Intel chip sales, I think we will see blowout numbers b apple tomorrow. What people fail to realize with apple is that they seem to be one of the few companies remaining that can deliver a better quality product and actually have customers pay more for it. Most other companies in the pc space, cannot convince customers to pay for the better product (e.g. Dell, with alienware and then adamo).
  • addicted44addicted44 Posts: 811member
    Quote:
    Originally Posted by bedouin View Post


    Why can't these companies just not rush to get a product out and instead focus on making a really awesome one, even if there is a two year wait?



    It's like -- I'm not inherently against the competition, but everyone comes to the party saying, "Me too!" instead of, "Look at what I've accomplished . . . "



    Anyone want to imagine the thrashing apple would be getting in the blagosphere if they had released a playbook like product (I.e. iPad with mail and calendar only if you have an iPhone....crashes all the time...software is half baked and you don't even have twitter and Facebook clients!).



    And rim does this despite being a year late. While no reviews have praised them, none have called them out for the complete lack of respect they are showing for their users' intelligence. Of course, people who do buy the playbook by lining up (presumably these are early adopters who'd should be aware of all the issues) probably deserve the level of respect rim is showing them.
  • solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by addicted44 View Post


    Anyone want to imagine the thrashing apple would be getting in the blagosphere if they had released a playbook like product (I.e. iPad with mail and calendar only if you have an iPhone....crashes all the time...software is half baked and you don't even have twitter and Facebook clients!).



    And rim does this despite being a year late. While no reviews have praised them, none have called them out for the complete lack of respect they are showing for their users' intelligence. Of course, people who do buy the playbook by lining up (presumably these are early adopters who'd should be aware of all the issues) probably deserve the level of respect rim is showing them.



    Don?t forget: no native iPad apps or SDK, just iPhone apps that look horrible.



    I think if Apple released a Tab, Xoom or PlayBook-like device I bet the tablet market would not exploded the way it did and we?d be seeing none of these new players in this market because it would still be a failed endeavor.
  • addaboxaddabox Posts: 12,667member
    Problem being RIM likely can't make any money at those price points, and would probably lose money on every unit sold.



    MS can afford to do that, and burn through billions in order to establish themselves in a given market-- ala the Xbox and most likely WP7. But RIM doesn't have billions to burn through, they need to be making money now. By the time a loss leader paid off for them with significant market share, they'd most likely be out of business.
  • rabbit_coachrabbit_coach Posts: 1,114member
    Quote:
    Originally Posted by Radjin View Post


    Priced to compete how? Like Prunes to Watermelons. The PlayBook is an oversized PDA. Priced to compete would be less then half the price for less then half the functionality and size.



    But unlike RIM's PlayBook, my PalmPilot PDA, dated somewhere back in the mid 90's has got integrated calendar and email functionality.
  • irnchrizirnchriz Posts: 1,403member
    I wonder how many play books RIM had manufactured? They will have had to have paid out for these already and will be expecting a return within a short period of time. The longer these units sit in warehouses and stores the worse this will get for RIM.



    they are in a better position financially than PALM were but unsold inventory is a major cost and has the potential to dent your Market image and value.
  • iansilviansilv Posts: 283member
    Whoa! Wow! Wait- you mean the playbook is not selling well??!? Man, thats weird- didn't see that coming... Like a fiery meteor streaking towards Earth!



    Rim is run by a couple of idiots.
  • mac.worldmac.world Posts: 340member
    Quote:
    Originally Posted by irnchriz View Post


    I wonder how many play books RIM had manufactured? They will have had to have paid out for these already and will be expecting a return within a short period of time. The longer these units sit in warehouses and stores the worse this will get for RIM.



    they are in a better position financially than PALM were but unsold inventory is a major cost and has the potential to dent your Market image and value.



    Based on what has been reported that 1000 stores carried the Playbook and each one got 5, that would be 5000 tablets. And they couldn't sell all of those.
  • suddenly newtonsuddenly newton Posts: 13,052member
    Quote:
    Originally Posted by solipsism View Post


    Don?t forget: no native iPad apps or SDK, just iPhone apps that look horrible.



    I think if Apple released a Tab, Xoom or PlayBook-like device I bet the tablet market would not exploded the way it did and we?d be seeing none of these new players in this market because it would still be a failed endeavor.



    It would have been as well received as Microsoft's failed $1000 UMPCs. There's your long awaited Windows on a tablet!
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