So there was interesting press release action coming out of Waterloo today. In a nutshell, Research In Motion is going to suck a 485 million dollar loss on the Playbook this quarter. It’s not a giant surprise or anything – everyone knows that they have sold less than 100K of the things and great teetering stacks of unwanted shipments are piled up and gathering dust in the retail channels.
What is interesting is the crazy amount of spin going on in the guts of the statement. My favourite bits of smoke-n-mirrors are these two gems from CEO Mike Lazardis:
“Although a number of factors have led to the need for an inventory provision in the third quarter”
“Early results from recent PlayBook promotions indicate a significant increase in demand across most channels. We look forward to continuing to grow the installed base of PlayBook users”
For those of you that don’t speak RIM, the effective translations are:
“Sure our app store sucks and the thing doesn’t even have email, but we honestly thought our brainwashed business users would buy it anyway.”
“Two weeks ago we dropped the price to below cost and managed to move a couple of handfuls. So we’re going to drop the price to 99 bucks next month.”
What’s really vexing here is that it didn’t have to be this way. With their purchase of QNX and an army of smart and creative people on staff, RIM should have been able to come up with – at worst – a basically competent tablet. And really, given the entrenched legions of “Blackberry über alles” diehards at the top levels of the corporate IT biosphere, that would have been all they needed to grab second place in the market and go from there. Instead, they dropped a big ol’ turd and then seemed honestly surprised when no one wanted to pick it up.
I’ve thought about this a lot and two possibilities come to mind as far as the possible cause for getting blindsided this badly.
One: Someone sold them a bill of goods regarding Adobe Flash and – despite there being no valid reason for and a bucket full of compelling reasons against having Flash on a mobile device – they stuck with it even when it became evident that Flash was going to cripple the thing in crucial areas like response time, browser speed, and battery life.
Two: The decision makers at RIM’s very top level still can’t see how tablets are changing the mobile and personal computing markets forever, and (fanatically clinging to the idea that their two-decades old handheld is still the pinnacle and the rest of the world will come back home sooner rather than later) they have mentally and technically positioned the Playbook as a Blackberry accessory instead of a stand-alone player in a new marketplace.
Truth be told, I’m leaning towards number two. If you look at the Playbook as an add-on to enhance your Blackberry experience, it suddenly makes sense. Was this less of a tablet and more of a way to preserve Blackberry sales and functionality going forward? We might never know. But I wouldn’t bet against it.