RIM to bear $485 million charges for low PlayBook sales

Reports over the past months have made it clear that PlayBook, RIM's ambitious step at tablets did not quite perform the way its makers expected it to. In fact, just a couple of months ago, we had reported about several units of the PlayBook tablet were lying untouched in RIM's inventory, all bearing testimony to the fact that sales of the tablet have not been upto the mark. Now, an official post on the company's blog states that RIM has agreed to bear charges of this loss, which amount to a mind boggling $485 million, roughly $360 million after tax with respect to the inventory valuation of BlackBerry PlayBook tablets.

Paying a big price

The post further reads that, "As previously disclosed, RIM has a high level of BlackBerry PlayBook inventory. The Company now believes that an increase in promotional activity is required to drive sell-through to end customers.  This is due to several factors, including recent shifts in the competitive dynamics of the tablet market and a delay in the release of the PlayBook OS 2.0 software. As a result, RIM will record a provision that reflects the current market environment and allows it to expand upon the aggressive level of promotional activity recently employed by the Company in order to drive PlayBook adoption around the world."

However, not everything worked against RIM's favour. Earlier in the week, we had reported about Best Buy declaring that they officially sold out all online units of the PlayBook tablet, even the factory refurbished units after the company shaved off the original pricing - $199.99 and $299.99 for the 16GB and 32GB models for the Black Friday promotions. 

While the picture looks grim now, RIM's Co-CEO, Mike Lazaridis, stated that, "RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, 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."