RIM drastically cuts PlayBook sales target, report says

Q2 sales expected to be one-third original estimate, suppliers say

RIM has cut its sales target for PlayBook tablets in the second quarter to one-third of its original estimate, according to Taiwan-based suppliers cited in a report.

Research In Motion has adjusted its second-quarter PlayBook sales target from 2.4 million units to between 800,000 and 900,000 units, according to the report in Digitimes, which cited unnamed sources in the supply chain. RIM declined comment on the report.

The report presents a different picture from the one RIM officials offered last week when they said they were pleased with the 500,000 PlayBook sales during the final six weeks of RIM's first quarter, which ended May 28.

Those Playbook figures were one of the few bright spots in RIM's mostly dreary report of its first-quarter financial performance, which featured forecasts of lower smartphone revenues, layoffs and product shipment delays.

RIM said in the conference call (registration required) on its first-quarter results that the PlayBook had recently been launched in 11 markets outside the U.S., and that in coming weeks it would go on sale in another five markets, where the sales opportunity would be as large as North America's. Last week, the PlayBook launched in the U.K. in 730 retail stores "and early feedback has been excellent," officials said on the call.

Digitimes is normally a reliable source of information, even when it cites unnamed sources. The information from its industry sources in the RIM PlayBook story tended to differ from RIM's message by noting that PlayBook demand had been lower than expected after the first day of sales in April. "Since the company was only able to sell about 500,000 units in total by early June, it will be difficult for the company to achieve its original [second-quarter] goal," the story said, citing the unnamed sources.

Analysts such as Jack Gold of J.Gold Associates said the initial report of 500,000 PlayBook sales was encouraging, even if the figure is well behind sales totals for Apple's iPad, the No. 1 tablet. Orders from Apple to suppliers are expected to reach 8 million to 10 million in the second quarter, Digitimes said.

Digitimes said that shipments for the Motorola Xoom, Acer Iconia, Asustek EeePad Transformer and the PlayBook average 100,000 to 200,000 units per device model per month.

RIM last week said that PlayBooks designed to run on WiMax or HSPA+ or LTE cellular networks have been delayed until the fall; the company had originally said they would ship this summer. The current version of the PlayBook is Wi-Fi only.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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