RIM can’t catch a break. Not only is the company coping with dismal PlayBook tablet sales, it’s also taking a near half-billion-dollar hit for sitting inventory that must now be sold at rock-bottom prices.
RIM announced on Friday that the company wouldn’t be meeting its financial targets for the year, primarily due to the unsuccessful performance of the BlackBerry PlayBook tablet. It pushed 150,000 units this quarter, compared with 250,000 last quarter, and 500,000 in the first quarter of the year.
The company is offering the troubled tablet for dramatically discounted prices through Dec. 3. Prices were slashed $300 across the product line-up, and quickly sold out at retailers like Best Buy by last week’s Black Friday. Nonetheless, RIM announced today that it’s recognizing “a pre-tax provision in the third quarter of fiscal 2012 of approximately $485 million, $360 million after tax, related to its inventory valuation of BlackBerry PlayBook tablets.”
Quick to note an “increase in demand,” RIM’s co-CEO Mike Lazaridis offered up continued support for the tablet.
“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy,” he said in today’s press release. “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.”
RIM’s BlackBerry PlayBook jumped on the tablet trend a bit prematurely. The device had a number of software issues right out of the gate, most notably problems with Flash content. It garnered lackluster reviews that led to a limited distribution network as carriers like Sprint opted not to sell the device.
And no, RIM’s PR troubles don’t end with substantial loss warnings. In a microcosmic example of adding insult to injury, a couple of its employees just sparked an international incident.
A pair of RIM employees on a non-stop, Beijing-bound flight knocked back a few too many drinks and started misbehaving so badly that the plane turned around and dropped them off in Vancouver. Due to industry regulations regarding the number of hours a flight staff can work, the flight, which originated in Montreal, was grounded for 18 hours and its 314 passengers were put up in hotels for the night.
two RIM employees were arrested for their behavior, and have to pay Air Canada a fine of $35,878 each. They’re also on one-year probation from flying Air Canada, and are suspended from RIM pending further investigation.