RIM ready to clear PlayBook stockpile

Having sold just 200,000 PlayBooks since the product launched, Research in Motion has planned a big campaign to clear out its costly inventory, it confirmed Thursday. 

The news comes after RIM reported a disappointing second quarter for fiscal 2012 during which net income fell sharply from $695 million to $329 million compared with the previous corresponding period.

Sales figures for the PlayBook were well short of the 400,000 to 600,000 expected for RIM's second quarter, with the stockpile responsible for some of the additional $400 million sitting in its inventory, now valued at $1.4 billion.

Making matters worse, RIM had “made a strategic investment in high-value components related to PlayBook that were in tight supply at the time of the commitment,” according to a Seeking Alpha transcript of chief financial officer Brian Bidulka's comments.  

RIM co-founder and CEO Mike Lazaridis said the PlayBook “established itself as a high-performance tablet” in an immature but growing market, pointing to the Australian and US Governments’ approval of the device for staff use as a sign of that potential.

A slew of software enhancements were expected to be released in an October “over the air” PlayBook 2.0 update, said Lazaridis, including native email - the feature that gave rise to speculation RIM had rushed through an unfinished product that was patched up with the BlackBerry Bridge app. 

The release would also include native calendar and contacts, the ability to run Android apps, new enterprise features and a video store which Lazaridis promised would launch with 10,000 movies and TV shows for rent or purchase and improvements to BlackBerry Bridge. 

The company’s plan to clear out its PlayBook stockpile included “special incentive programs” for the enterprise, rebates for the channel, and a loyalty program for existing BlackBerry users.

RIM has already commenced a PlayBook sale in its home territory, according to the Boy Geneius Report, with Canadian wireless carrier Rogers reportedly selling the 16GB PlayBook, normally $499 in Canada ($549 in Australia), for just $249.

The deal was only available to Rogers' staff at present, but was taken by some as a sign of the price drops to come for US customers. 

Analysts commenting on RIM's second quarter results said the company needed to focus on bringing new products to market and in particular those based on the company’s much lauded QNX operating system.

“RIM now needs to focus its attention on its next portfolio refresh and ensure a smooth transition to the QNX platform, which is used in the Blackberry PlayBook,” said Adam Leach from Ovum.

The results were based on sales of older Blackberry phones and didn’t take into account the new range of phones running version 7 of the Blackberry operating system.

Nevertheless RIM reported a 40 percent increase in the Blackberry installed base during the second quarter compared to a year ago.

The company told the market that it expected to see phone shipments in the third quarter increase by between 27 and 37 percent compared with the second quarter.