.

SmartMoney Blogs

Real-Time Advice
Our real-time advice on how market shifts and news impact you and your money

Will RIM Dump its Unsold Tablets?

In addition to its plummeting profits and sinking stock, BlackBerry maker Research In Motion is also sitting on a huge inventory of unsold tablets. Some analysts say a fire sale is inevitable.

Although the company hasn’t officially discounted the device, RIM’s PlayBook is selling on Amazon.com and other sites for 40% off its $499 retail price. But even at a discount, experts say buyers should know the risks of getting gadgets with uncertain futures.

RIM said its fiscal third-quarter earnings plummeted a whopping 71%, mostly because shoppers have shunned its tablets. The company took a $485 million charge related to unsold PlayBooks. RIM’s stock price has also dropped by over 70% so far this year, putting further pressure on the company to boost profits – and sales.

So RIM  may have little choice but to find a way to unload the remaining tablets, if demand doesn’t pick up, says Rick Singer, CEO of marketing site GreatApps.com, says RIM will need to shift its unsold inventory. “RIM is in a downward spiral and has been for some time,” he says. Apple’s iPad, Amazon’s Kindle Fire and Barnes & Noble’s Nook Tablet continue to dominate the tablet market, he says.

The company wouldn’t comment on such a possibility, but during a call Thursday executives said that demand is expected to increase following the release of a new operating system  in February.

Though holiday shoppers might be tempted by the PlayBook, experts say it’s main drawback even at the cheaper price is a much smaller library of apps compared to competitors. Apple currently has over 600,000 apps,  Android has 325,000, but  Blackberry offers just  51,000 apps, according to app aggregator site MobileWalla.com. “Everyone wants to be where the masses are and that’s on Apple and Android,” says Singer. “The Android market is really gaining steam.”

Electronic sales are being driven by tablets and smartphones this holiday season, but Apple and Amazon are leading the race. “RIM is clearly not seeing the benefit,” Singer says. Amazon’s $199 Kindle Fire costs less than 50% of the Playbook and iPad 2, which start at $499, and has Wi-Fi, Flash video and access to Android apps and games — plus movies, books, songs and other digital content Amazon sells.

It may be too late for this version of the PlayBook, says Seth Rabinowitz, a partner at management consulting firm Silicon Associates. “I don’t think the PlayBook even makes a good paperweight let alone a stocking stuffer, unless its a gift for your business-engineering-studying nephew as an example of what not to put on the market,” he says.

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (4 of 4)

View all Comments »
    • By the way the Sprint fire sell will be on december 26th

    • The playbook is out of stock in Best Buy and other retailers.Actually Sprint will sell playbooks at 199 price. Playbooks have features like cameras,text software that made them a bargain. The article should say about the rush for playbooks during Black Friday.

    • RIM has strange culture and political environment.

      In RIM if a new hired person figure out major problem and introduce efficient approach, both manager and his buddy group member will proof their wrong approach works. just like someone point out driving a car is right way, pushing a car is wrong way, then both manager and his buddy group member will hate you, and proof that 3 person can also move the car by pushing it. cheating email will be sent to some vice president, saying like: see, the car moving, pushing a car is a natural part of the process, in order to deny contribution of introduce skill of drive a car, thet deny merit of driving a car.

      It is very strange company culture and strange company political environment, it promote stealing and cheating skill. RIM’s management may be a typical instance in MBA course.

      This culture deny or steal hardworking team members’ contribution/innovation, generate strange political environment, destroy RIM.

    • As I have said before, you should not be looking at this inventory at its discounted price, but at its *disposal cost*, which is mostly likely $-50/unit. The article says why. An abandoned platform for an unknown OS is worthless.

About Real-Time Advice

  • How breaking news — in the markets, Washington, and around the world — affects you and your money. Have a question about how current events may change your financial future? Email us at ask@smartmoney.com.

.