RIM's (RIMM) Future Depends on PlayBook Success, But Road Ahead is Bumpy...
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Research In Motion (Nasdaq: RIMM) shares are off to another tough start Monday, following more reports of a dire outlook on its PlayBook tablet.
Last week, RIM said it will need to take a $485 million pre-tax provision related to PlayBook inventory. Monday, Bloomberg reports RIM's efforts to keep pace with Apple's (Nasdaq: AAPL) iPad in the marketplace is hampering the company's overall performance. With PlayBook sales slumping, the grim reality for RIM is the company will probably have to sell the tablet for a loss in order to draw interest.
Basically, the future of RIM depends on it.
The PlayBook runs RIM's BBX software, a new operating system RIM is betting the house on. Cancellation of PlayBook sales might show a lack of confidence in the new OS, one analyst quipped. Doing so might drive even more customers to Apple and Google (Nasdaq: GOOG) Android-based systems, and will leave the two with even less competition.
PlayBook sales have slipped from 500,000 in its initial offering quarter to 150,000 in the last quarter. Over the four-day shopping weekend starting with Black Friday, retailers like Best Buy (NYSE: BBY) said the price of the PlayBook was cut by $300 for either the 16- or 32-gigabyte model, to $199 and $299, respectively.
At those prices, RIM is already losing money. Add to the mix the Kindle Fire, from Amazon (Nasdaq: AMZN), priced at $199, and RIM has no choice but to take the loss if it plans on returning to the RIM of yesteryear.
RIM stock is 1.9 percent lower Monday.
Last week, RIM said it will need to take a $485 million pre-tax provision related to PlayBook inventory. Monday, Bloomberg reports RIM's efforts to keep pace with Apple's (Nasdaq: AAPL) iPad in the marketplace is hampering the company's overall performance. With PlayBook sales slumping, the grim reality for RIM is the company will probably have to sell the tablet for a loss in order to draw interest.
Basically, the future of RIM depends on it.
The PlayBook runs RIM's BBX software, a new operating system RIM is betting the house on. Cancellation of PlayBook sales might show a lack of confidence in the new OS, one analyst quipped. Doing so might drive even more customers to Apple and Google (Nasdaq: GOOG) Android-based systems, and will leave the two with even less competition.
PlayBook sales have slipped from 500,000 in its initial offering quarter to 150,000 in the last quarter. Over the four-day shopping weekend starting with Black Friday, retailers like Best Buy (NYSE: BBY) said the price of the PlayBook was cut by $300 for either the 16- or 32-gigabyte model, to $199 and $299, respectively.
At those prices, RIM is already losing money. Add to the mix the Kindle Fire, from Amazon (Nasdaq: AMZN), priced at $199, and RIM has no choice but to take the loss if it plans on returning to the RIM of yesteryear.
RIM stock is 1.9 percent lower Monday.
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