RIM remains confident of PlayBook uptake despite slower start

Research In Motion (RIM) announced it will record a pre-tax provision of US$485 million due to poor sales of its Playbook tablets, and also warned that sales of all its products in the fourth quarter will be below that achieved in the third.

RIM has a high level of Blackberry Playbook inventory, having sold approximately 150,000 PlayBook tablets into the channels in Q311.

"RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers, which also offers unique security and manageability features for the enterprise," said Mike Lazaridis, co-CEO of RIM.

While the company is still in the process of finalising its Q3 financial results, it shipped approximately 14.1 million BlackBerry smartphones in the quarter ended November 26, 2011, which was in line with previous guidance of between 13.5-14.5 million. Adjusted revenue in the third quarter, excluding a charge against revenue of approximately US$50 million related to the service outage that occurred in the quarter, is expected to be slightly lower than the previously guided range of US$5.3-5.6 billion, reflecting product mix and the impact of PlayBook sell-through programmes in the quarter. Gross margin is expected to be in line with previous guidance of approximately 37 per cent.