The tragedy that is Research In Motion
RIM's right about that ... if by "fiction," it means "facts."
Fact No. 1
The analyst that sparked the kerfuffle, Collins Stewart, bases its assertions on recent news out of Taiwan's Quanta Computer. Quanta helps RIM manufacture the PlayBook, but the contract manufacturer recently "laid off a significant number of production workers from a factory focused on producing the PlayBook." Business-wise, this would appear to make sense. After all, RIM only sold 500,000 PlayBooks in the second half of the fiscal first quarter -- and sales are reportedly in free fall, with the company moving only 200,000 units in all of the second quarter. Clearly, RIM is struggling to compete with Apple's
Fact No. 2
Could Collins be wrong about that? It's certainly possible, and RIM sounds adamant about its plans to continue selling the PlayBook. (Then again, announcing anything else would surely panic the market and dissuade even more consumers from considering buying a soon-to-be-defunct product.) Fortunately, we don't have to just take Collins (or RIM) on its word alone in figuring this out. No sooner had the analyst released its report than market researcher NPD Group backed Collins' view of events. According to NPD, "supply chain research indicates [RIM has no] production plans for PlayBooks beyond this year."
I'm begin to see a trend here ...
Fact No. 3
And that's not all. Over at Best Buy
Shades of HP
Perhaps it's just a matter of seeing current events through the rearview mirror of what happened at Hewlett-Packard
So if RIM looked at the HP debacle and thought to itself, "Hey! These guys got it all backwards! To get the best prices on our junk, we need to liquidate the inventory before we tell people it's discontinued!" could you blame them? Sure, that might not be the most honest and forthright way to break the news to its customers, but as a ploy to maximize profits on a losing position, I couldn't fault the logic.
Now let me state this straight out: I could be entirely wrong about this. Collins Stewart could be wrong, too, and NPD could be mistaken as well. RIM could be telling us the truth about its plans to keep the clock running on PlayBook. Or it could be just trying to "keep its options open" as it waits to see if the price cuts at Best Buy spark a buying frenzy like the one we saw happen with the TouchPad.
But even if this is just RIM playing for time, I suspect the writing is on the wall. There's no denying PlayBook isn't selling well. And I honestly don't think that RIM choosing a "liquidation price" of $299 -- $200 higher than the price HP picked, and $100 higher than the cost of Amazon.com's
Whether RIM plans to kill it or not, I think we're looking at "game over" for the PlayBook.