[bbfan1040]

Playbooks in stores so sold out that BB now selling at same discount prices directly. Sounds like clearance of inventory. Still thankful for fun I have had since April! And, bought 2nd a month ago for wife.

[VerryBestr]

There are several estimates for the "Bill of Materiels" (BoM) in the PlayBook. iSuppli has estimated a BoM of $271. The article linked by the OP referred to an estimate of $205 by UBM TechInsights. This estimate was made when the PlayBook came out.

However, UBM TechInsights is now making an estimate of $170 for the PlayBook BoM. The drop is not that surprising, since the price of some electronic components drops quickly as technology progresses. For example, the PlayBook's processor (OMAP 4430) has probably become a low-cost alternative to TI�s new flagship processor (the pin-compatible OMAP 4460).

The spread among various estimates shows how little is actually known about the deals RIM has been able to strike with its suppliers (volume commitments, penalties, price variation with time/volume, etc. ...) and when the PlayBooks being sold now were actually manufactured. The PlayBook contains a bunch of TI chips, and RIM could have negotiated a good price with TI when TI needed design wins.

To me, the most interesting info in the UBM TechInsights estimates is the price variation over the 3 models: $170 for the 16GB PlayBook, $185 for the 32GB model, and $235 for the 64GB model. Even after other costs (manufacturing, distribution, guarantee and reparation, royalty), I would think that RIM would be turning a profit on the 64GB PlayBooks at $400. The 32GB model could even be profitable, particularly for direct sales.

This price difference suggests that you will not be able to add your own memory to any new PlayBook model (unless RIM comes out with an expensive expandable deluxe model).

I just do not believe that RIM will be able to return to the old PlayBook pricing, so this looks to me like something of a close-out sale. But a tablet is a strategic necessity for RIM. So I suspect there will soon be new PlayBook models, perhaps a low priced entry model and other higher priced models (mobile connectivity? more enterprise oriented? more expandable?).

Simply repackaging the current PlayBook with version 2 software would probably get negative press coverage (the PlayBook FINALLY gets decent software). A new improved model would make a bigger media splash, even if the material improvements were minor. Would new tablets even be named PlayBook?

BoM estimates do have the PlayBook containing less expensive components than does the iPad. It is a shame that RIM did not play the price card from the beginning.

As far as non-Economist101's rather snarky comment about the price difference implying that "the PlayBook hardware really isn't superior to the iPad [sic]," it just shows that you can't jump to snap conclusions. Perhaps RIM found more inspired hardware engineers? Various tests I've read conclude that the PlayBook actually does some measurable hardware advantages over other tablets, namely:
o) by far the brightest screen (both default and maximum brightness), making it one of the few tablets usable in direct sunlight (remember that when comparing battery life to other tablets).
o) the best color fidelity of any tablet.
o) one of the best (if not the best) speaker systems, certainly better than the iPad's.

[howarmat]

There are several estimates for the "Bill of Materiels" (BoM) in the PlayBook. iSuppli has estimated a BoM of $271. The article linked by the OP referred to an estimate of $205 by UBM TechInsights. This estimate was made when the PlayBook came out.

However, UBM TechInsights is now making an estimate of $170 for the PlayBook BoM. The drop is not that surprising, since the price of some electronic components drops quickly as technology progresses. For example, the PlayBook's processor (OMAP 4430) has probably become a low-cost alternative to TI�s new flagship processor (the pin-compatible OMAP 4460).

The spread among various estimates shows how little is actually known about the deals RIM has been able to strike with its suppliers (volume commitments, penalties, price variation with time/volume, etc. ...) and when the PlayBooks being sold now were actually manufactured. The PlayBook contains a bunch of TI chips, and RIM could have negotiated a good price with TI when TI needed design wins.

To me, the most interesting info in the UBM TechInsights estimates is the price variation over the 3 models: $170 for the 16GB PlayBook, $185 for the 32GB model, and $235 for the 64GB model. Even after other costs (manufacturing, distribution, guarantee and reparation, royalty), I would think that RIM would be turning a profit on the 64GB PlayBooks at $400. The 32GB model could even be profitable, particularly for direct sales.

This price difference suggests that you will not be able to add your own memory to any new PlayBook model (unless RIM comes out with an expensive expandable deluxe model).

I just do not believe that RIM will be able to return to the old PlayBook pricing, so this looks to me like something of a close-out sale. But a tablet is a strategic necessity for RIM. So I suspect there will soon be new PlayBook models, perhaps a low priced entry model and other higher priced models (mobile connectivity? more enterprise oriented? more expandable?).

Simply repackaging the current PlayBook with version 2 software would probably get negative press coverage (the PlayBook FINALLY gets decent software). A new improved model would make a bigger media splash, even if the material improvements were minor. Would new tablets even be named PlayBook?

BoM estimates do have the PlayBook containing less expensive components than does the iPad. It is a shame that RIM did not play the price card from the beginning.

As far as non-Economist101's rather snarky comment about the price difference implying that "the PlayBook hardware really isn't superior to the iPad [sic]," it just shows that you can't jump to snap conclusions. Perhaps RIM found more inspired hardware engineers? Various tests I've read conclude that the PlayBook actually does some measurable hardware advantages over other tablets, namely:
o) by far the brightest screen (both default and maximum brightness), making it one of the few tablets usable in direct sunlight (remember that when comparing battery life to other tablets).
o) the best color fidelity of any tablet.
o) one of the best (if not the best) speaker systems, certainly better than the iPad's.

agree on those points. the processing power is also very good and competes with other top tablets. Hardware and spec wise the PB is top 5 i would say. RIM just needs to software to compete. Hopefully that comes in Feb or even sooner.

[TechAlberta]

Anyone care to hazard a guess as to how many PlayBook users there are worldwide, now. I guess there were about 700K a week ago....

[DaveTheA]

Well for those of us who paid full price, knowing it costs 1/3 of the price paid to make is not comforting.

I bought mine in May, full price. I was pretty sure the price would be coming down sooner or later...that's been the case for just about every electronic device I've ever bought. Would I have waited six months if I knew I'd save myself $300 ? No. Have I enjoyed having and using my Playbook over the last six months? Heck, yeah!

I have to roll my eyes a bit over RIM's goofy handling of the Playbook's support and marketing, and felt a bit of anxt over wondering whether that support would continue....still completely worth it.

[TechAlberta]

Has anyone bought a 16GB for $199 in the last 24 hours?

[TechAlberta]

Looks like the sale ended yesterday...

[lawguyman]

That article is a fantasy. RIM just took a half a billion dollar charge related to Playbook inventory.

If RIM was only losing $6 a Playbook and sold 1 million of them that would only be a $6 million charge.

Can anyone do simple math? This is delusional.

[Economist101]

That article is a fantasy. RIM just took a half a billion dollar charge related to Playbook inventory.

If RIM was only losing $6 a Playbook and sold 1 million of them that would only be a $6 million charge.

Can anyone do simple math? This is delusional.

Not if they sold 81 million! Ha! The joke's on you!

[anthogag]

That article is a fantasy. RIM just took a half a billion dollar charge related to Playbook inventory.

If RIM was only losing $6 a Playbook and sold 1 million of them that would only be a $6 million charge.

Can anyone do simple math? This is delusional.

The details of the write-down charge were never explained. Many different things can factor into the equation.

Maybe some of it was forecasting so they didn't actually lose money but won't make what they said they would...I read in another thread that RIM like to forecast earnings

[cfarm3]

That article is a fantasy. RIM just took a half a billion dollar charge related to Playbook inventory.

If RIM was only losing $6 a Playbook and sold 1 million of them that would only be a $6 million charge.

Can anyone do simple math? This is delusional.

You're confusing BOM(bill of materials) cost with COGS(cost of goods sold)

They are not the same by a long shot.

I believe the $271 BOM was for a 16GB model, so the 32 and 64GBs would be more.

[TheScionicMan]

That article is a fantasy. RIM just took a half a billion dollar charge related to Playbook inventory.

If RIM was only losing $6 a Playbook and sold 1 million of them that would only be a $6 million charge.

Can anyone do simple math? This is delusional.

It's not a simple math problem, it is accounting.

[lawguyman]

It's not a simple math problem, it is accounting.

It is accounting but it is still simple math.

RIM took a $485 million charge related to what it called "its inventory valuation of BlackBerry PlayBook tablets." The only missing pieces to the puzzle is to know how many Playbooks RIM has made or had in the pipeline and what value RIM now gives them.

If RIM made 1 million Playbooks and wrote their value down to $0, that would mean that RIM had each Playbook on its books at $485. That is preposterous. Accounting rules say that inventories have to be valued at the �lowest of cost or market�. Thus, if a Playbook costs $200 to make and sells in the store for $500, RIM will hold that Playbook at $200 on its books.

So, RIM had Playbooks on its books valued at at least $485 million. Let's assume that RIM wrote their value down to $0, meaning that RIM believes that they have no worth at all, If a Playbook costs $300 to make, this means that RIM wrote down the value of around 1.6 million Playbooks to $0.

But, RIM did sell some Playbooks at for amounts above the "lowest cost or market." Maybe a few hundred thousand. These Playbooks should be off RIM's books altogether.

Still, my guess is that RIM had each Playbook on its books at close to $300 and that their value is now written down to $0. This means that RIM could literally give them away and have no further negative impact on its financial condition.

If I am wrong it measnt hat there are still a LOT more Playbooks out there that have yet to be sold.

[OMGitworks]

It is accounting but it is still simple math.

RIM took a $485 million charge related to what it called "its inventory valuation of BlackBerry PlayBook tablets." The only missing pieces to the puzzle is to know how many Playbooks RIM has made or had in the pipeline and what value RIM now gives them.

If RIM made 1 million Playbooks and wrote their value down to $0, that would mean that RIM had each Playbook on its books at $485. That is preposterous. Accounting rules say that inventories have to be valued at the �lowest of cost or market�. Thus, if a Playbook costs $200 to make and sells in the store for $500, RIM will hold that Playbook at $200 on its books.

So, RIM had Playbooks on its books valued at at least $485 million. Let's assume that RIM wrote their value down to $0, meaning that RIM believes that they have no worth at all, If a Playbook costs $300 to make, this means that RIM wrote down the value of around 1.6 million Playbooks to $0.

But, RIM did sell some Playbooks at for amounts above the "lowest cost or market." Maybe a few hundred thousand. These Playbooks should be off RIM's books altogether.

Still, my guess is that RIM had each Playbook on its books at close to $300 and that their value is now written down to $0. This means that RIM could literally give them away and have no further negative impact on its financial condition.

If I am wrong it measnt hat there are still a LOT more Playbooks out there that have yet to be sold.

They would be foolish to write them down to $0. It would also violate GAP standards to do so. They can be conservative but not ridiculous. It is reasonable to go to $150 or $100, maybe, but 0, no way. That is why it is so hard to understand the accounting. I guess we will know more on the 15th when they actually release their financials because given what we know, the numbers just don't make sense. If we knew how many were made, sold, and in the pipeline, we'd have a better sense. What is clear, well as clear as it can be, is that at the time RIM had to be sitting on a lot of PB's, somewhere in the supply and inventory chain. The 15th will be interesting even with the pre-announcement.

[lawguyman]

They would be foolish to write them down to $0. It would also violate GAP standards to do so. They can be conservative but not ridiculous. It is reasonable to go to $150 or $100, maybe, but 0, no way. That is why it is so hard to understand the accounting. I guess we will know more on the 15th when they actually release their financials because given what we know, the numbers just don't make sense. If we knew how many were made, sold, and in the pipeline, we'd have a better sense. What is clear, well as clear as it can be, is that at the time RIM had to be sitting on a lot of PB's, somewhere in the supply and inventory chain. The 15th will be interesting even with the pre-announcement.

I agree with you. As I mentioned, if the Playbooks were not written down to $0, then there are a lot more of them out there.

[TechAlberta]

Did we ever figure this out?