“Amateur hour is over,” RIM’s BlackBerry PlayBook marketing read, in an obvious jab at the Apple iPad. But RIM has had to write off $485 million in unsold PlayBooks, according to a December 2 press release, an amount that Morgan Stanley analyst Ehud Gelblum estimates amounts to roughly 1.4 million tablets.
RIM’s sales didn’t even allow it to make the top 5 (non-Apple) tablet brands in the United States, according to an NPD report, and the other brands have had to resort to sales and promotions to allow them to move tablet inventory. The number one non-Apple brand, Hewlett Packard, only reached that peak after bailing out of the market and selling off all its unsold HP TouchPads in a $99 fire sale.
Is the PlayBook next?
RIM hasn’t said that a last-ditch fire sale is on the agenda. But the press release does say that “an increase in promotional activity is required to drive sell-through to end customers,” and attributes “a significant increase in demand for the PlayBook” to its earlier promotions.
According to Trevor Mogg of Digital Trends, these promotions have included a half-off holiday sale from Best Buy; a buy-two-get-one-free sale for business customers; and a free BlackBerry PlayBook for companies that upgrade to version 5 of the BlackBerry Enterprise Server. Future promotions are likely to target businesses first and foremost, but the number of PlayBooks in retail sales channels suggest that more sale prices might be in the works.
What went wrong for the PlayBook?
The same thing that went wrong for every tablet other than the iPad: People bought the iPad instead. And while Barnes and Noble and Amazon.com have seen success by selling half-price, e-reader tablets tied into each bookseller’s marketplace, most non-iPad tablets are so outwardly similar to the iPad that Apple is suing some manufacturers for infringement.
RIM tried to position the PlayBook as a more “professional” tablet than the iPad, but its contradictory marketing emphasized its ability to play Flash video at the same time as HD games like Need for Speed. App developers were turned off by poor developer tool quality and RIM’s needlessly stringent requirements for its developers — so strict, compared to Apple’s and Google’s, that they were lampooned in an open letter by Jamie Murai called “You Win, RIM!” And even BlackBerry fans quickly found that the PlayBook’s built-in email client would only work if a BlackBerry smartphone was attached.
How to get rid of 1.4 million BlackBerry PlayBooks?
Someone at RIM is probably asking themselves that question right now. For now, RIM’s press release just says that it will ” expand upon the aggressive level of promotional activity recently employed by the Company”.