RIM’s Playbook a Failure of Expectations

by Matt Klassen on June 24, 2011

From the Playbook’s inception it was clear that Research in Motion’s plan for its tablet was to keep it away from Apple’s wildly popular iPad, allowing it to carve out its own niche in the enterprise communication market.

The problem was, however, that it was equally clear to many analysts and observers that such a distinction within the tablet market had yet to be made, with consumers looking to tablets not so much as business or entertainment tools, but as all-encompassing portable computing tools. The point being in all this; whether RIM liked it or not, its Playbook would have to compete with the iPad, a battle it simply couldn’t win.

So it should come as no surprise then to hear that due to weak demand for the enterprise tablet RIM is drastically slashing its sales targets for its Playbook. While it will come as cold comfort to the Waterloo company, it does look like RIM is not alone however, as several other companies have had to cut their sales forecasts as well.

In a story first reported by tech site DigiTimes, according to a source within RIM’s Taiwanese supply chain, the Blackberry maker has reduced its sales targets for the second quarter of this year from a whopping 2.4 million to a relatively paltry 800,000. While the Playbook saw some initial success when it was released in April, moving between 40,000 and 50,000 units, consumer and corporate interest in the Playbook has waned, and RIM is responding accordingly.

At the outset I will say that slashing its sales targets on its Playbook is a failure only in RIM’s expectations, who clearly overestimated the Playbook’s ability to attract consumer and corporate clients alike. That said, RIM is certainly not alone in this miscalculation, as almost every tablet maker has been forced to slash its sales targets in the face of the unflinching onslaught of Apple’s iPad.

In fact, according to J.P. Morgan analyst Mark Moskowitz, the “weak showing” of most major iPad alternatives, the Motorola Xoom, the Playbook, and Samsung’s Galaxy Tab, has led to an approximate 10 percent reduction in tablet building plans this year already.

As further evidence of just how difficult it is to compete with Apple’s marketing machine, among all the global tablet makers it looks like only Apple, HTC, and Lenovo have maintained their original production figures since March. Others like Dell, Acer, RIM, Motorola, Toshiba, and Samsung have all cut their plans by double digit figures.

While misery certainly does love company, this all comes as cold comfort to RIM, a company that essentially put all its remaining eggs in its Playbook basket, only to see that basket fall to the ground.

For a company that has been forced to cut jobs, watch its stocks plummet, and witness the agonizingly slow demise its once successful Blackberry, it will be interesting to see how RIM copes with yet another failure of expectations.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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