Beleaguered RIM’s PlayBook mistake forebodes doom for BlackBerry-maker

“The beleaguered owner of BlackBerry has issued a profit warning after being forced to slash the price of its PlayBook tablet computer to clear stock,” Alex Ralph reports for The Times.

“Research In Motion said in a trading statement, issued yesterday ahead of third-quarter results later in the month, that it had taken a $485 million (£310 million) pre-tax charge to account for the sharply lower value of the tablets, which originally were priced at $500 but now sell for only $200 in the United States,” Ralph reports. “Worldwide, sales of the PlayBook have dropped from about 500,000 in the first quarter to 150,000 in the third. In Britain, retailers including Dixons and Carphone Warehouse have been discounting the tablet by a third.”

Ralph reports, “The PlayBook charge comes as analysts have started to conclude that RIM’s management cannot turn the company around. They are beginning to value it not on its future prospects but on how much it would be worth if acquired, broken up, or simply run down while keeping the BlackBerry service going.”

In an accompanying analysis, Murad Ahmed writes for The Times that Research In Motion’s PlayBook tablet “was a reaction to Apple’s iPad and to a belief that the tablet market would take off. That, in itself, was a mistake. Two years after Apple’s machine was launched, there is no tablet market, just an iPad market.”

MacDailyNews Take: Sounds familiar:

Scratch tablets. Let’s call it what it really is: The iPad market.MacDailyNews Take, July 21, 2011

Ahmed writes, “The iPad had set a standard and the PlayBook fell short of it, then expected customers to pay more for an inferior product. It is the kind of mistake that can doom a company.”

Read more in the full article here.

MacDailyNews Take: You read it here first:

RIM is a dead company walking.MacDailyNews Take, August 23, 2010

If you got out of RIMM then and there ($47.75 at close), you’d have $30.98 more per share than if you exited yesterday ($16.77 at close).

[Thanks to MacDailyNews Reader “Mike Caine” for the heads up.]

Related articles:
Beleaguered RIM misses its revenue forecast; takes $360 million bath to clear unsold PlayBooks; shares plummet – December 2, 2011
Apple ousts beleaguered RIM’s BlackBerry as top business smartphone – November 16, 2011
Beleaguered Sony shares sink on massive loss forecast – November 2, 2011
Beleaguered RIM’s U.S. sales cut in half last quarter as consumers abandoned BlackBerry for Apple iPhone – September 20, 2011
Apple’s iPhone 4 absolutely slaughtered beleaguered RIM’s Blackberry – September 16, 2011
Beleaguered RIM hemorrhaging market share faster than some analysts expected – September 16, 2011

21 Comments

  1. RIMM was at 70 this year, and 140 before that, now 16 and sinking.

    A RIMM TOST analysis (+-PBAJ) towards BUN is not a pretty sight (and on a BACN graph, a cautionary tale).

  2. Just tried to click thru to the article and The Times site is a mess… finally found article using the search but only about 5 or 6 lines and then the same old pop up trying to get me to buy the Sunday edition… if you furnish a link to an article, how about trying it before posting to see if it works..

    1. I can’t even get that far. The on-sight search gives me a link to the article, but clicking on it just brings me back to the main page.
      The Times of London is now one of Murdoch’s worthless rags, isn’t it?

  3. MDN: “If you got out of RIMM then and there ($47.75 at close), you’d have $30.98 more per share than if you exited yesterday ($16.77 at close).”

    Yes, true.

    But if you thought (or knew) that RIM’s stock price would go down and decided to ‘short’ the stock, you could make quite a bundle. Many have.

    Maybe that’s why RIM’s co-CEO’s aren’t that worried about it; perhaps they’ve been betting against their own company.

    ‘Insider trading’, anyone?

    MaWo: ‘opportunity’. As in, ‘with knowledge’.

  4. Old news…RIM’s no doubt already talking to M&A firms.

    I predict they sell the patents to one firm and the messaging service/IP to someone else and pay off the shareholders with what is left.

    It is easy to blame the Hydra CEO team, but in fact it sounds like to me that RIM’s “vision” of ‘keyboard email phones’ & their engineering focused on such products did not have the breadth of talent to compete with the well funded & well connected Apple.

    It took an amazing amount of software and hardware and carefully cultivated supplier relationships to pull off the iPhone. RIM missed it.

    Apple realized that once you got on the “new” iPhone treadmill, you couldn’t stop. Hence, Apple has 1 new phone release each year to keep the competition constantly lagging behind; plus the secret sauce. Total device connectability is what puts & keeps Apple in the lead. Maintaining track of data is a pain if it is not done nearly automatically.

    Is it bad? 1 century ago there were hundreds of car companies just in the U.S. Now there are 3 US based makers along with a dozen foreign makers. Arguably consumers are doing well with better autos at reduced real costs.

    Personal communication devices may well settle in to just 2-3 suppliers, given the costs of trying to keep up with the top 1 or 2 players. The complexity of hardware, software and behind the scenes support systems are incredibly expensive to set up and maintain.

    My prediction is RIM = sold in 12 months.

  5. How the snotbags have fallen. I’m still pissed at RIM’s “thanks Apple, we’ll take it from here” “amateur hour is over” attitude.

    Amateur hour will be over soon.

  6. RIM’s a victim of plain old hubris on the part of its joint CEOs as well as the notion that two CEOs are better than one.

    Shame they did not pay any attention to the various public statements by its own senior engineers.

    I would not be surprised to see a break up in the next 90 days…

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