"The PlayBook sold just a half-million units in the first quarter of availability, but dropped to 250,000 the following quarter. In the third quarter, sales dipped to just 150,000."
I smell a shareholder lawsuit coming. Two quarters ago they were committed to earning $7.50 per share, and now they admit they won't even get to $5.25.
On what grounds? If RIM honestly felt that earnings would be $7.50 per share 6 months ago and events since then have changed their estimate, then there are absolutely no grounds for a law suit.
Please don't feed the 'sue first and ask questions later' mentality.
Quote:
Originally Posted by Tulkas
Correct, RIM has shown more restraint in their pricing, but they are still selling it at or below cost when selling it at $200 to the public. That sets the bar far below profitability for tablets in general, excluding the iPad. As I said, between HP and RIM selling at or below cost (and Amazon now too) the price consumer are willing to pay is dropping for all tablets that aren't iPad. That has to make the other manufacturers wonder whether it is worth playing anymore.
And that's what will change things. People are worried that the new price point for a 10" tablet is $99 or $199. Not a chance. At that price, manufacturers simply won't make any. Manufacturers will make 10" tablets to sell at $399 (or perhaps $299) and that's the price the consumer will have to pay if they want a tablet. Of course, if the manufacturers are smart, they'll make much smaller quantities until they determine if they can sell them.
I think if the Playbook goes down to maybe $59-$79 I would pick one up just to have a GPS-enabled tablet around the car or for short trips (under a few days) that way if it were to be lost/stolen/broken I wouldn't shed as many tears as I would for an iPad.
But what RIM is doing is smart. First, allow your best (business) customers to get them free/cheap. Then allow your employees to do the same. So basically all the most important and loyal backers to RIM will have gotten their cheap Playbook pretty soon.
Then once all those markets are exhausted, unleash a clearance sale to the general public. That way the rest of us can get them pretty cheap (if inventory still exists) while all the best customers are taken care of and won't complain that they were screwed like they did with the HP Touchpad.
And that's what will change things. People are worried that the new price point for a 10" tablet is $99 or $199. Not a chance. At that price, manufacturers simply won't make any. Manufacturers will make 10" tablets to sell at $399 (or perhaps $299) and that's the price the consumer will have to pay if they want a tablet. Of course, if the manufacturers are smart, they'll make much smaller quantities until they determine if they can sell them.
The market is self-correcting.
The problem for the other manufactures is that they will continue to be squeezed. On one side, they will have Apple sucking away the demand for customer that are willing to pay a premium. On the other hand, they will have Amazon who will continue to sell their tablet at or around cost, as long as their content business benefits.
Every time a manufacturer decides to release a new model, they are going to be stuck trying to appeal to Apple's customers with premium tablets. None have shown that ability yet. Alternatively, they are try to undercut Apple's pricing, but then they will be competing against another giant in Amazon, willing to sell at whatever it takes to move units to sell content. Amazon can match them for every feature and always sell it for less and still make money (again assuming success in content sales).
The market self-correcting is going to lead to the market imploding and leaving Apple, Amazon and a few manufacturers willing to stick around in a market where they sell at below niche numbers for peanuts of margins.
The $485 million charge is a smokescreen meant to distract everyone from this little tidbit:
Quote:
"The Company is still in the process of finalizing its fourth quarter outlook, and based on preliminary estimates, RIM expects unit shipments in the fourth quarter to be below third quarter levels."
The fact that RIM will sell fewer phones in Q4 than in Q3 is much more significant than PlayBook's failure.
[...] But what RIM is doing is smart. First, allow your best (business) customers to get them free/cheap. Then allow your employees to do the same. So basically all the most important and loyal backers to RIM will have gotten their cheap Playbook pretty soon.
Then once all those markets are exhausted, unleash a clearance sale to the general public. That way the rest of us can get them pretty cheap (if inventory still exists) while all the best customers are taken care of and won't complain that they were screwed like they did with the HP Touchpad.
Using that logic, RIM would be even smarter to just give PlayBooks away free. To everyone. Forever.
Or, extrapolating, RIM could actually *pay* people to take PlayBooks off their hands. Even better!
(I, for one, would welcome the opportunity to own a PlayBook if RIM paid me, oh, $200 or $300.)
They would gain enormous market share, PlayBooks would be everywhere, and RIM would "win."
Right?
Oh wait. I keep forgetting that mobile is the most profitable segment of the computing market.
And that pad computing can be extremely profitable if you can sell a highly desirable product with big margins.
Popular pad computers, like iPad, can earn many billions for their manufacturers. In profits.
So maybe Apple's model of selling extremely popular pad computers for huge profits is the way to go.
You're so right. What a joke this turned out to be. RIMM has no choice now but to exist the tablet market and try to minimize the remaining write-off. I can't fathom a scenario where the Playbook bounces back and becomes viable. None
This should be the fear in God in some of the wannabes that they will lose their proverbial shirt unless they know what the fuck they are doing. Next up for a big write-off is going to be Samsung
Oh man. Canada has had a rough go of it in the tech industry. When I was taking electrical engineering in university back in the early 90's, a dream job would have been to work for Nortel. Then in early 2000, RIM became the next tech darling for the great white north. But it looks like big brother south of the border has given little brother north of the border a big can of whoop-ass. No wonder Canadians always have this inferior complex when compared to their neighbour.
Why would you pay $199 for a shitty 7" tablet that doesn't do anything with no bright future ahead of it when you could get the Kindle? The TouchPad at least had a decent screen and an E-Mail client.
As I said, between HP and RIM selling at or below cost (and Amazon now too) the price consumer are willing to pay is dropping for all tablets that aren't iPad. That has to make the other manufacturers wonder whether it is worth playing anymore.
Indeed. If you go to Best Buy, they have a row of also-ran tablets on display. I can't imagine that any of them have a real chance to reach any kind of a critical mass, or to even turn a profit. I see most of them being sold on WOOT and Overstock.com or blown out on eBay by a liquidation company.
The non-iPad tablet industry is a mess, especially given that its brightest lights are extremely cheap to buy. 2012 will be interesting. Will ICS and powerful hardware be enough to make a dent? Will the Transformer Prime make any kind of an early splash? Will we see lots and lots of cheap tablets that are basically as good as the Fire and the Nook Tablet? Will there be any middle ground between $200 and $500?
They said that 2011 was going to be the year of the tablet, but so far, not so much. CES will be a hypefest this time around too, I'd wager.
The key point is that there is no way for the PB to be a viable business for RIM. None! If they sell all of their stock at the current prices, they lose money on every sale and gain an insignificant market. They have no content to sell, and can never make it up with app revenue. They can not successfully raise the price back up to profitable levels. No one would buy at that price. They certainly didn't before. They won't encourage more phone sales as the only people getting full use from a PB are BB users already. They're image is not being improved by the PB as they are a laughing stock in the industry. They have traded amateur hour for comedy hour. So far, no one has suggested a single scenario in which RIM makes a success of the PB.
The only thing they can do is start over and build a device that was intended to be sold for $200. Even so, they have to contend with the entrenched bottom feeders who are already established in that category. There simply is no roadmap for success that I can see.
Poor poor iPad competitors. It's rather sad that they have to resort to such drastic measures. Maybe some one will feel sorry for them and buy 20k of their tablets. Think cobble tablet street.
Comments
Neil...those are units SHIPPED, not units sold!
I smell a shareholder lawsuit coming. Two quarters ago they were committed to earning $7.50 per share, and now they admit they won't even get to $5.25.
On what grounds? If RIM honestly felt that earnings would be $7.50 per share 6 months ago and events since then have changed their estimate, then there are absolutely no grounds for a law suit.
Please don't feed the 'sue first and ask questions later' mentality.
Correct, RIM has shown more restraint in their pricing, but they are still selling it at or below cost when selling it at $200 to the public. That sets the bar far below profitability for tablets in general, excluding the iPad. As I said, between HP and RIM selling at or below cost (and Amazon now too) the price consumer are willing to pay is dropping for all tablets that aren't iPad. That has to make the other manufacturers wonder whether it is worth playing anymore.
And that's what will change things. People are worried that the new price point for a 10" tablet is $99 or $199. Not a chance. At that price, manufacturers simply won't make any. Manufacturers will make 10" tablets to sell at $399 (or perhaps $299) and that's the price the consumer will have to pay if they want a tablet. Of course, if the manufacturers are smart, they'll make much smaller quantities until they determine if they can sell them.
The market is self-correcting.
But what RIM is doing is smart. First, allow your best (business) customers to get them free/cheap. Then allow your employees to do the same. So basically all the most important and loyal backers to RIM will have gotten their cheap Playbook pretty soon.
Then once all those markets are exhausted, unleash a clearance sale to the general public. That way the rest of us can get them pretty cheap (if inventory still exists) while all the best customers are taken care of and won't complain that they were screwed like they did with the HP Touchpad.
And that's what will change things. People are worried that the new price point for a 10" tablet is $99 or $199. Not a chance. At that price, manufacturers simply won't make any. Manufacturers will make 10" tablets to sell at $399 (or perhaps $299) and that's the price the consumer will have to pay if they want a tablet. Of course, if the manufacturers are smart, they'll make much smaller quantities until they determine if they can sell them.
The market is self-correcting.
The problem for the other manufactures is that they will continue to be squeezed. On one side, they will have Apple sucking away the demand for customer that are willing to pay a premium. On the other hand, they will have Amazon who will continue to sell their tablet at or around cost, as long as their content business benefits.
Every time a manufacturer decides to release a new model, they are going to be stuck trying to appeal to Apple's customers with premium tablets. None have shown that ability yet. Alternatively, they are try to undercut Apple's pricing, but then they will be competing against another giant in Amazon, willing to sell at whatever it takes to move units to sell content. Amazon can match them for every feature and always sell it for less and still make money (again assuming success in content sales).
The market self-correcting is going to lead to the market imploding and leaving Apple, Amazon and a few manufacturers willing to stick around in a market where they sell at below niche numbers for peanuts of margins.
One word: arson.
"The Company is still in the process of finalizing its fourth quarter outlook, and based on preliminary estimates, RIM expects unit shipments in the fourth quarter to be below third quarter levels."
The fact that RIM will sell fewer phones in Q4 than in Q3 is much more significant than PlayBook's failure.
[...] But what RIM is doing is smart. First, allow your best (business) customers to get them free/cheap. Then allow your employees to do the same. So basically all the most important and loyal backers to RIM will have gotten their cheap Playbook pretty soon.
Then once all those markets are exhausted, unleash a clearance sale to the general public. That way the rest of us can get them pretty cheap (if inventory still exists) while all the best customers are taken care of and won't complain that they were screwed like they did with the HP Touchpad.
Using that logic, RIM would be even smarter to just give PlayBooks away free. To everyone. Forever.
Or, extrapolating, RIM could actually *pay* people to take PlayBooks off their hands. Even better!
(I, for one, would welcome the opportunity to own a PlayBook if RIM paid me, oh, $200 or $300.)
They would gain enormous market share, PlayBooks would be everywhere, and RIM would "win."
Right?
Oh wait. I keep forgetting that mobile is the most profitable segment of the computing market.
And that pad computing can be extremely profitable if you can sell a highly desirable product with big margins.
Popular pad computers, like iPad, can earn many billions for their manufacturers. In profits.
So maybe Apple's model of selling extremely popular pad computers for huge profits is the way to go.
Flip a coin.
* wifi only
* RIM product
* 7" screen
* Android abortion OS.
Amateur hour is now truly over.
You're so right. What a joke this turned out to be. RIMM has no choice now but to exist the tablet market and try to minimize the remaining write-off. I can't fathom a scenario where the Playbook bounces back and becomes viable. None
This should be the fear in God in some of the wannabes that they will lose their proverbial shirt unless they know what the fuck they are doing. Next up for a big write-off is going to be Samsung
Almost half a billion in unsold inventory? Looking for a way out?
One word: arson.
That is a good one. Never say never
Who'd have thought that the "pros" of having Flash wouldn't have outweighed the cons of:
* wifi only
* RIM product
* 7" screen
* Android abortion OS.
Android abortion OS? We are still talking about the Playbook, right?
Correct. Apple is doomed.?
Notice how as companies are going nose down their paid trolls starting to disappear here at AI
Oh man. Canada has had a rough go of it in the tech industry. When I was taking electrical engineering in university back in the early 90's, a dream job would have been to work for Nortel. Then in early 2000, RIM became the next tech darling for the great white north. But it looks like big brother south of the border has given little brother north of the border a big can of whoop-ass. No wonder Canadians always have this inferior complex when compared to their neighbour.
Well, don't beat yourself up.
Your banks could be like ours......
As I said, between HP and RIM selling at or below cost (and Amazon now too) the price consumer are willing to pay is dropping for all tablets that aren't iPad. That has to make the other manufacturers wonder whether it is worth playing anymore.
Indeed. If you go to Best Buy, they have a row of also-ran tablets on display. I can't imagine that any of them have a real chance to reach any kind of a critical mass, or to even turn a profit. I see most of them being sold on WOOT and Overstock.com or blown out on eBay by a liquidation company.
The non-iPad tablet industry is a mess, especially given that its brightest lights are extremely cheap to buy. 2012 will be interesting. Will ICS and powerful hardware be enough to make a dent? Will the Transformer Prime make any kind of an early splash? Will we see lots and lots of cheap tablets that are basically as good as the Fire and the Nook Tablet? Will there be any middle ground between $200 and $500?
They said that 2011 was going to be the year of the tablet, but so far, not so much. CES will be a hypefest this time around too, I'd wager.
The only thing they can do is start over and build a device that was intended to be sold for $200. Even so, they have to contend with the entrenched bottom feeders who are already established in that category. There simply is no roadmap for success that I can see.
Using that logic, RIM would be even smarter to just give PlayBooks away free. To everyone. Forever.
Just like Apple does with the 3GS!
Oh wait. I keep forgetting that mobile is the most profitable segment of the computing market.
And that pad computing can be extremely profitable if you can sell a highly desirable product with big margins.
Just like Apple does with the i4S!
Ahh, AI's first dose of Schadenfreude for the day. Classy.
There was a traffic jam on the high road, so AI took the low road
Besides, RIM makes it sooo damn easy
Plus, it makes up for the years during which Microsoft and all the rest of the world danced on Apple's grave.
I received a black Friday ad from Dick's Sporting Goods: buy a treadmill, get a FREE ANDROID tablet, made by Coby.