[lawguyman]

If Playbook is not selling well it makes sense for RIM to slow production. I think the thing that disturbs me most is that this article suggests that RIM is not confident that it can turn sales around. As a result, the manufacturer, Quanta is laying off 1,000 employees.

Much of this is speculation.

From BGR:

Research In Motion is reportedly slowing production of the BlackBerry PlayBook tablet following its second-quarter earnings report, during which the vendor stated that only 200,000 PlayBooks were sold into sales channels in the quarter. RIM co-CEO Jim Balsillie confirmed on the company’s earning call that the PlayBook would begin to see price reductions, and the beginnings of RIM’s effort to push PlayBooks off store shelves can likely be seen in an employee-only sale at Rogers. According to a new report, however, RIM isn’t overly optimistic that its efforts with the PlayBook will pay off. Read on for more.
Industry watcher DigiTimes on Wednesday reports that RIM’s manufacturing partner Quanta has cut back its PlayBook production lines in light of decreased orders. Moreover, RIM seemingly has no intention of reviving heavier production in the immediate future, as Quanta is said to be laying off as many as 1,000 workers from its PlayBook lines. Quanta confirmed that layoffs are underway according to the report, but would not comment on whether or not the workforce reduction is tied to RIM or the PlayBook.

RIM had placed orders for between 4 million and 5 million BlackBerry PlayBook tablets back in April of this year according to DigiTimes, but the Waterloo, Ontario-based vendor has shipped fewer than 800,000 units at this point. The report also says orders have dipped substantially to just 100,000 units per month in the third quarter. Quanta will reportedly pay severances averaging $3,420 per worker dismissed from its PlayBook production lines.

[grover5]

They might need to do a firesale of sorts when they release OS 2.0 if they want to seriously occupy space on the market.

Posted from my CrackBerry at wapforums.crackberry.com

[menaknow]

Only other thing I can think of is with the power button and QC complaints, RIM might be looking are for another manufacturer.

But where never going to know until someone makes an official statement. For now its all speculation...

[lnichols]

Wow BGR stating the obvious. The initial run was reportedly for 1 million units, and they have only shipped 700,000. If they are still having runs produced then that means there is a warehouse somewhere with a ton of Playbooks collecting dust. Yes they would tell the company manufacturing them to slow/halt production, if any were even made after the initial million. I think a firesale at some point is inevitable. RIM is taking too long to get the 2.0 update out, and they need to get QNX out there to start building hype for the QNX phones.

[bb-bandit]

If Playbook is not selling well it makes sense for RIM to slow production. I think the thing that disturbs me most is that this article suggests that RIM is not confident that it can turn sales around. As a result, the manufacturer, Quanta is laying off 1,000 employees.

Much of this is speculation.

From BGR:

The writing has been on the wall for a while with RIM and the PB. No surprise here. The PB is reaching the end of the line. RIM is getting creamed by the competition. The company has had two very bad earnings calls in a row and the new earnings call doesn't look good either. iphone 5 being introduced Oct. 5th and ipad3 around the corner doesn't bode well for RIM and its line-up of phones and tablets. I think we all wished RIM would've listened to its customers for the past two years....but in typical RIM fashion, they ignored the market. PB is being phased out.

[OMGitworks]

Only other thing I can think of is with the power button and QC complaints, RIM might be looking are for another manufacturer.

But where never going to know until someone makes an official statement. For now its all speculation...

I am afraid you are way off base here. They would have fixed the issue not sought another manufacturer.

[trsbbs]

Demand is not high enough to justify the production numbers.

RIM has tons of the PBs in the pipeline and their is currently no need for the
higher then demand production ability.

Tim

[tstrike34]

Call me cheery or hopeful, but RIM has to know (by now) what is going to take PB to the next level. Failure to do otherwise is absolute doom.

The Co-CEOs can't be that stupid, can they?

[bbqkid8]

The writing has been on the wall for a while with RIM and the PB. No surprise here. The PB is reaching the end of the line. RIM is getting creamed by the competition. The company has had two very bad earnings calls in a row and the new earnings call doesn't look good either. iphone 5 being introduced Oct. 5th and ipad3 around the corner doesn't bode well for RIM and its line-up of phones and tablets. I think we all wished RIM would've listened to its customers for the past two years....but in typical RIM fashion, they ignored the market. PB is being phased out.

They can't phase out the PB. At least not until they have the QNX phones out. The PB is their only platform with the QNX OS on it, so what would that say if they cut it out before a phone is even out?

And it's BGR... the three biggest letters in speculative journalism, or a guy with a blog that thinks the world of himself.

[bb-bandit]

Demand is not high enough to justify the production numbers.

RIM has tons of the PBs in the pipeline and their is currently no need for the
higher then demand production ability.

Tim

Bingo! It's simple math...not enough buyers. The lack of native email at launch was a big misstep. Not sure RIM can overcome the bad reviews. Also, if you have been to Best Buy or Staples, it is hard to find a PB that isn't bricked or a store salesman that knows how to navigate the device. That has hurt RIM as well. IMO, RIM should abandon the PB and focus on getting its phone line competitive again. They can enter the tablet space at another time. Right now, RIM should dedicate their limited resources towards saving their phone line up and brand image, which is getting badly tarnished by one failed launch following another failed launch.

[Economist101]

\ If they are still having runs produced then that means there is a warehouse somewhere with a ton of Playbooks collecting dust.

There must be a picture somewhere. . .found it.

[menaknow]

I am afraid you are way off base here. They would have fixed the issue not sought another manufacturer.

I disagree. The cost of looking bad due to "defects" and dealing with a company that doesn't want to own up to it, might be financially more expensive then terminating a contact in the long term.

Or if the existing manufacture stated the cost to make the changes/fixes and they are high, they might have cut there losses and gone new. A new manufacturer to get the business will attempt to price their margin's lower to get the business. It happens all the time.

Like I said, I don't care for speculations I want facts. It could be exactly what is stated that they produced a surplus in Q2 and now can sit back and sell existing inventory.

It is too easy to jump to conclusions. And in this market, there is way to many...

[menaknow]

Demand is not high enough to justify the production numbers.

RIM has tons of the PBs in the pipeline and their is currently no need for the
higher then demand production ability.

Tim

Agreed, this is my personal thought too...

[lawguyman]

If RIM ordered a million and has shipped (but not sold) 600,000, that means that there are 400,000+ Playbooks that RIM has to get rid of before it needs to place another order. Kevin from Crackberry thinks that there are not many more than 200,000 Playbook users out there. Say there have been 300,000 sold. That means that there are 700,000 unsold Playbooks.

There are two ways out of this. Both involve stimulating demand. (1) price reductions or (2) make it more desireable through better features.

700,000 would not be a lot to sell if Playbook was successful.

[mandony]

DUH! It does not take a genius to know why production is being slowed down

From their balance sheet dated Sep 15 2011
http://www.rim.com/investors/documen...ss_release.pdf

Assets, United States dollars, in millions
Cash and cash equivalents
August 27 2011: $851
February 26 2011: $ 1,791
(-$940 decrease in cash)

Inventories
August 27 2011: $1,372
February 26 2011: $618
(+754 increase in inventory)

From the last quarter RIM is sitting on INCREASED inventory and LOWER cash. They will SOON run out of cash it they continue to build inventory

[lawguyman]

Crackberry is reporting that there have been 1.5 million shipped and only 200,000 sold.

That's 1.3 million unsold Playbooks, if true.

It seems like something has got to give here and soon.

[randall2580]

I think RIM is going to have to come to grips with the fact that as currently priced, they will only sell so many Playbooks. As we have seen when there are coupons in the pipeline - there is demand for these devices at a reduced price and I think if RIM could get more aggressive pricing they would see a spike in demand.

I want a Playbook and have am a devoted Blackberry fan boy since the 7520 I have upgraded whenever there has been a chance to do so. But when I read these stories about high supply and lack of demand it doesn't make me want to race out and buy one and see the price $200 cheaper in a few days and I feel like that's bound to happen soon.

[adrenaline_x]

Best thing to do is price the Playbook as cheap as possible with out losing money vs the production cost.

A target price of 200-300 for the 16 GB would probally make it sell like crazy compared to other tablets especially when and if os 2.0 launches will all its expected updates.

The playbook needs a market pressence and needs to be in the hands of end users. Once more people have a playbook the more revenue a dev can make off and app the more devs will wade into the playbook app market.

That and get a bunch of celebrities onboard and pay them to endorse the device!!

And play up the browser " If you don't have a playbook, chances are you need an app for that games, page, feature"

[menaknow]

The sale that Rogers is offering right now, if offered to customers would make users give a second look at the playbook and buy more.

I just hope RIM isn't waiting till OS 2.0 launch and thinking THAT will cause more playbooks to sell...

[2000 Man]

Best thing to do is price the Playbook as cheap as possible with out losing money vs the production cost.

No, the best thing to do is price the Playbook as cheap as possible to SELL, regardless of losing money vs the production cost. Remember, these have already been paid for and produced. Getting ANYTHING for them is better than the NOTHING that they're currently getting.

[lawguyman]

If RIM has a firesale, it will never be able to make money on this product because no one would ever be willing to pay more than the firesale price.

So, if the $250 price (or $150 price in some cases) was the price for everyone, that would mean that the product is done, at least in my opinion.

RIM could release a Playbook 2 with better specs and tehy might have a chance with that but say goodbye to Playbook 1.

[2000 Man]

^^^ Everyone has ALREADY said goodbye to Playbook 1. Look around.

[bb-bandit]

Call me cheery or hopeful, but RIM has to know (by now) what is going to take PB to the next level. Failure to do otherwise is absolute doom.

The Co-CEOs can't be that stupid, can they?:confused:

Storm 1, Storm 2, PB launched without native PM...I rest my case.

[qingyuank]

what a waste.
brilliant product, brilliant engineers and designers,
Useless feedback department.

and the biggest of them all, USELESS MANAGEMENT.
if i had my way steve jobs would be ceo at rim and the 2 brick heads can be janitors.

[bb-bandit]

Crackberry is reporting that there have been 1.5 million shipped and only 200,000 sold.

That's 1.3 million unsold Playbooks, if true.

It seems like something has got to give here and soon.

This has HP Touchpad written all over it...the only difference is that RIM typically ignores the writing on the wall. This is a company that loves to make its shareholders and customers suffer. We will have to endure additional quarters of poor earnings and a launch of 2.0 that will include numerous bugs, still missing key apps all in the face of the launch of the ipad3, which will steal all the good reviews and and TV time. PB will eventually prove not be financial feasible (if it hasn't been proven already), but RIM won't pull the plug until its brand has suffered more damage and its customers are painfully humilated. I wish RIM would wake-up.