[bitek]

This last 450mil inventory charge. is it due to unsold inventory or loss on discounted prices

[shootsscores]

Inventory. However, at these sale prices it seems that PBs have been flying off the shelves. Margins will take a hit but RIM is doing what it has to to break into the ifad -not tablet- space.

[Economist101]

Inventory. However, at these sale prices it seems that PBs have been flying off the shelves. Margins will take a hit but RIM is doing what it has to to break into the ifad -not tablet- space.

Exactly. If people won't buy your product, then you pay them to take it. In this case, $50- $75 per unit PlayBook subsidies are being paid, thus the announced charge that is 20%+ larger than last quarter's company-wide net profit.

Edit: To be clear, MS did the same thing with the original Xbox console from date one. The difference was that Microsoft was still earning billion dollar quartely profits even after the hit.

[urbanguy]

However, at these sale prices it seems that PBs have been flying off the shelves.

Not sure if they're "flying" off the shelves at the rate that RIM needs them to. Isn't the speculation that there are still over 1 million + in inventory unsold?

I was in Best Buy last week (not for a PB) and hung out for a while in the tablet section. I chatted with some people, and found that I was trying to convince them to buy the Playbook at $199. I had two people arguing with me that it wasn't a good buy, and I finally said, "Look, it's a $500 product on sale for $200! It's a deal!"

I don't think I convinced them ...

[shootsscores]

Not sure if they're "flying" off the shelves at the rate that RIM needs them to. Isn't the speculation that there are still over 1 million + in inventory unsold?

I was in Best Buy last week (not for a PB) and hung out for a while in the tablet section. I chatted with some people, and found that I was trying to convince them to buy the Playbook at $199. I had two people arguing with me that it wasn't a good buy, and I finally said, "Look, it's a $500 product on sale for $200! It's a deal!"

I don't think I convinced them ...

Many reports of sell outs since the sale prices. I have walked into retailers to check out the PB display and have had to educate the sales guy about how the PB works and invariably the sales person had no idea of the PB's capabilities. There is a reason why there was a changeover of the top marketing position at RIM.

[bbfan1040]

Because of large unsold inventory, RIMM couldn't count sales to retailers until actually sold by retailers. So, better to sell at modest loss than have non producing inventory!

Sales of cell phones, etc could be recorded as sales when sold to retailers.

Holding unsold inventory is expensive!

Selling at reduced prices makes sense. Buy one for a friend or relative or for a spare! Just tell them to be patient about apps. Competitors are charging so much more.

I am enjoying a few Android apps on beta v 2.

[bitek]

this is weird because there are still people who want to buy PB and yet there are no where to be found !

[Unsure2]

Lately, the PB has been completely sold out in the stores I checked. But, some of those stores--Staples, for instance--seem convinced the PB is being discontinued and are getting rid of accessories. They may know something we haven't yet been told. I suspect RIM has more stock coming down through the factory pipeline, and it will be interesting to see if we get another fire sale when it arrives.

People buy computers, even tablet computers, to run software. As I am not going to sign on to RIM's yet-undelivered-upon promises, I have to tell people the PB has great hardware but to buy it only if it will do the job in its present state.

Another big problem with the Playbooks on display in stores, I have noticed, is that they often don't work. One had a problem with the on/off switch (according to the clerk, and I could not get it to work, either). Another had a power problem. Another just wouldn't work... I am always gratified when I encounter one that is actually working But, lest anyone think it is a plot, I also see this all the time with other display tablets. Beats me know these stores think they can sell merchandise when the display unit appears broken...

[esqlaw]

Exactly. If people won't buy your product, then you pay them to take it. In this case, $50- $75 per unit PlayBook subsidies are being paid, thus the announced charge that is 20%+ larger than last quarter's company-wide net profit.

Edit: To be clear, MS did the same thing with the original Xbox console from date one. The difference was that Microsoft was still earning billion dollar quartely profits even after the hit.

MS actually put out a good product with the xbox. It did not rely on future updates or promises. And it had a good launch with a great line up of software. And xbox wouldn't be the first console manuf. to sell at below cost. Nearly all of them have.