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Stop Lying to Your Customers, RIM

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Let's say you want to buy a Research In Motion (Nasdaq: RIMM  ) PlayBook for Christmas.

No, seriously.

Let's say you want the BlackBerry-centric tablet. You wind up at RIM's website. The price points start at $499. You thought they were being cleared out for far less than that, but you shake that off. PlayBooks being sold en masse at $199 for a limited time through some retailers must've been just a dream.

You decide you still want one -- even though now it's priced more like Apple's (Nasdaq: AAPL  ) iPad than Amazon.com's (Nasdaq: AMZN  ) Kindle Fire -- but then you see this tantalizing disclaimer:

Notice to Customers: Due to high volume of PlayBook orders, orders may take up to 7-14 business days to ship.

Wow! The PlayBook must really be hot if an order placed today is unlikely to beat Santa Claus to your door.

Where is this high volume coming from, you may ask? Wasn't the PlayBook a dud? Despite having 70 million BlackBerry subscribers, RIM sold just roughly 200,000 tablets during its fiscal second quarter that ended in August.

Well, it's at this point you realize that the clearance sale of $199 wasn't just a fantasy. Just a few days before the end of its fiscal third quarter, RIM did offer Kindle Fire-priced tablets through Best Buy (NYSE: BBY  ) , Wal-Mart (NYSE: WMT  ) , and a few other partners at a rock-bottom price. RIM even pitched it on Twitter in a Nov. 21 missive:

The #BlackBerry #PlayBook is at select #US & #Canadian retailers starting at $199. Limited time.

So what's the truth? Is there a high enough volume of pending PlayBook orders at $499, $599, and $699 that the smartphone pioneer can't seem to crank them out fast enough, or was RIM's inventory simply depleted by the $199 fire sale?

And let's cut to the obvious omission: When RIM reports earnings tonight -- and it reports far more than 200,000 PlayBooks being sold in its quarter ending Nov. 26 -- is it going to be honest about how many of those were picked up during its 60%-off sale? If not, will there be a sucker out there who believes the high number, runs off to the BlackBerry website to order one, and gets even more desperate on the realization that delivery is a couple of weeks away?

Did you see RIM top Herb Greenberg's list of the worst CEOs of 2011 on CNBC yesterday? Believe RIM at your own risk.

If you want to see how the tablet battle plays out, follow the players by adding Google, Research In Motion, Microsoft, Amazon.com, and Apple to My Watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

The Motley Fool owns shares of Best Buy, Wal-Mart Stores, Amazon.com, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Amazon.com, and Wal-Mart Stores, creating a diagonal call position in Wal-Mart Stores, creating a bull call spread position in Apple, and writing covered calls in Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 15, 2011, at 10:39 AM, bkuttenkuler wrote:

    There is a leaked sprint ad that continues the 199 sale from Dec. 26 to Jan. 7th. Sounds like the got hot at 199 and inventory started shrinking so they moved to the 499 price up until Christmas to slow down the rush on inv. Dont buy a playbook at the 499 price.

  • Report this Comment On December 15, 2011, at 12:41 PM, dxtx wrote:

    I ordered two Playbooks during that sale.

    It took over two weeks for me to receive the first one.

    I received one so far and started setting it up yesterday.

    I'm very impressed by the device and I like the size of it.

    So tell me, if it took two weeks for me to recieve my order how is it that RIM is lying ?

    Note that I previously purchased an Ipad 2. I returned it within two days because of all the flash sites it could not handle, and the fact that it cost so much for what it provided me.

    The Playbook has no problem with flash sites. I watched YouTube movies on it, and Amazon on demand too.

    Has the author used a Playbook ? I doubt it.

    I'm not impressed by the tactics of the author accusing RIM of lying. Give us a break. Your article title did catch my eye though, and bring me to this website.

    BTW, I'm not anti-Apple. I own a mid 2011 iMac, and an iPod touch. For me personally the Playbook is in the sweet spot of screen size (between an iPod touch and iPad) and it has great tech specs.

  • Report this Comment On December 15, 2011, at 1:03 PM, bkuttenkuler wrote:

    dxtx is right... I had the same thing happen when I ordered and I just recieved it and am very, very happy with the playbook. Very solid equipment, now I just need it to become popular so they dev more apps.

  • Report this Comment On December 15, 2011, at 1:27 PM, drfool21 wrote:

    The bandwagon of haters on RIM is astounding. I too am not anti-Apple and find it ridiculous to keep spreading this garbage about how RIM somehow is this low quality, poorly run dinosaur of a device brand. Remember, they like kind of started the whole smart phone revolution--and continue to deliver quality products for BUSINESS USERS...

    Now slow down, I can already hear the "they dont have enough apps" to stay competitive crowd. If you take time to step back, evaluate what your primary needs are in a smart phone, tablet, etc.--you will probably discover that RIM is actually still very much in the game. Could they have been a little quicker with their innovation this last year getting a tablet into the market and introducing an all touch smart phone device? Sure. But that in no way places RIM at the bottom of the barrel of high tech communication/entertainment devices.

    Come on people, take off the Apple glasses for a moment and stop following the herd... lest you all fall into the ditch!

  • Report this Comment On December 15, 2011, at 2:31 PM, melegross wrote:

    You guys amaze me! If you've been following their finances, you would see that their fortunes are falling. Sales are down in a growing market. Profits are down. They continually publish that they won't meet expectations, publish lowered ones, and don't meet those.

    The tablets have been panned by everyone, so to find a few people on a RIM thread that say its wonderful is to be expected. I don't even know if what is being said here is true, or just made up. It's hard to believe that someone actually bought two of these clunkers.

  • Report this Comment On December 15, 2011, at 3:09 PM, gobbler35 wrote:

    It's not clear who is lying here. In its recent PlayBook write-down announcement, RIM already stated, very clearly, how many PlayBooks were sold during the recent quarter. To quote, "RIM sold into the channels approximately 150,000 BlackBerry PlayBook tablets in the third quarter and sell-through to end customers, based on RIM's internal data, was higher than this amount."

    By my estimation, RIM has somewhat over 1.5 million PlayBooks in inventory and in sales channels. I think it is pretty obvious RIM will be repackaging these with its new version 2 software and relaunching the PlayBook next year.

    This was a limited sales event, perhaps to get the PlayBook in the news, perhaps to attract developers' attention, perhaps as an experiment on price sensitivity, perhaps to let RIM accountants accept the write-down/write-off and and get a lot of bad news out of the way at once.

    The direct RIM PlayBook sales to which the author refers are in fact handled by an outfit to which RIM has outsourced accessory sales. This outfit was obviously not tooled up to handle the kind of demand it received. The "high volume / slow shipping" warning went up during the sale, and this outfit is still trying, slowly it seems, to work through its shipping backlog.

  • Report this Comment On December 15, 2011, at 7:13 PM, dxtx wrote:

    melegross said

    "You guys amaze me! If you've been following their finances, you would see that their fortunes are falling."

    WTF do I say their fortunes aren't falling ?

    All I said is it took two weeks for me to receive my Playbook and I like it.

    And hey don't worry I'm not making up the story about buying 2 playbooks. Believe me or not, I don't care.

    As far as your comment "The tablets have been panned by everyone", I don't pan it, but what do you care you are probably short RIM.

    I have a recently manufactured one with up to date software, and hey remember reviewers were commenting about not being able to press the power button easily ? Well I have no such problem, either RIM fixed the power button, or those reviewers have fingers as thick as sausages.

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