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Research in Motion will write off an astounding $485 million from lowering the price of its underperforming BlackBerry PlayBook tablet, the company revealed today.
RIM has greatly struggled to keep up with its mobile device peers, especially Apple and Google’s various Android manufacturing partners like Samsung and HTC. The company has said repeatedly that its PlayBook tablet and a new smartphone OS, called BBX, would help lead the company to a new phase of innovation, but the PlayBook is a sales flop and the company’s latest critical software update to the tablet was delayed by several months. RIM lowered the price of the PlayBook to $199 in mid-November to spur more demand.
On top of taking a $485 charge on the BlackBerry PlayBook, RIM said it would fall short of its forecasted revenues in the third quarter and miss guidance for the year. The company will lose a lot of cash in selling its PlayBook tablets for less and will need to spend more to promote the units if it wants to drive sales.
RIM is still finalizing its fourth quarter guidance, but the company expects unit shipments across the board will be lower in the fourth quarter. The company said it also no longer thinks it will meet its full-year adjusted earnings guidance of $5.25 to $6 per share.
In response to the news, the Canadian phone-maker’s share price has plummeted today. As of mid-day Friday, RIM’s share price is down about 9 percent to $16.90. That’s a far, far cry from the stock’s 52-week high $70.54. With no immediate good news on the horizon, it’s no surprise the company’s investors are running away quickly.
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