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RIM To Step Up PlayBook Promotions

Canada – Research In Motion (RIM) will take a third-quarter pre-tax charge of
around $485 million to write down the value of its PlayBook inventory as part
of a bid to further step up PlayBook promotional activity, the company

 PlayBook sales have already spiked up based on
promotions that have reduced the tablet’s retail price to $199, but because the
company still has “a high level” of PlayBook inventory, “an increase in
promotional activity is required to drive sell-through to end customers,” the
company said.

 RIM attributed the need to “recent shifts in
the competitive dynamics of the tablet market and a delay in the release of the
PlayBook OS 2.0 software.” As a result, RIM said it would “record a provision
that reflects the current market environment and allows it to expand upon the
aggressive level of promotional activity recently employed by the company in
order to drive PlayBook adoption around the world.”

stepped-up promotional activity “will accelerate adoption of [RIM’s] QNX-based
platform by consumers and enterprises, as well as help to drive the development
of a vibrant application ecosystem in advance of its next generation BlackBerry
smartphones,” RIM said.

the launch of new price promotions in consumer and enterprise channels in the U.S.
and Canada late in the third quarter, RIM has enjoyed “a significant increase
in demand for the PlayBook,” the company said. RIM sold about 150,000
BlackBerry PlayBook tablets in the third quarter into distribution channels, and
that sell-through to customers was higher than that, the company said.

 Both consumer and enterprise customers who
purchase a new BlackBerry PlayBook at the current promotional pricing, as well
as existing PlayBook customers, will be able to upgrade to the enhanced
PlayBook OS 2.0 software at no additional charge when it becomes available in
February 2012, the company noted.

 The $485 million pretax writedown of PlayBook
inventory come to $360 million after taxes.