RIM sitting on 800,000 PlayBooks, report says

That's bad news for Research In Motion, which only shipped 700,000 PlayBook tablets to its retail partners over the past two months.

Research In Motion has a backlog of roughly 800,000 PlayBooks, The Guardian is reporting.

RIM's PlayBook Best Buy

Citing an analyst from Fubon Securities, the U.K. publication reported today that RIM's supplier, Quanta Computer, had shipped 1.5 million PlayBooks to RIM in the first half. But RIM has only shipped 700,000 Playbooks-- including 200,000 from the past quarter --to its retail partners.

The massive stockpile at RIM is another illustration of the struggles the BlackBerry-maker has faced in selling the tablet. It also adds a wrinkle to how the company plans to reduce the inventory. RIM has acknowledged that its retail partners are already sitting on unsold PlayBooks at their stores and has already shown willingness to cut its prices to spur sales .

During a quarterly earnings conference call last week, co-Chief Executive Mike Lazaridis said the company will start several programs to drive sales, including an incentive program for businesses, as well as rebates and deals for existing BlackBerry customers. Lazaridis didn't spell out how much of a discount the company will be offering.

Discounts have already been popping up. though. Staples began cutting the price earlier in the month, going as low as $449 for the 16GB version.

When Hewlett-Packard opted to scrap its WebOS business this summer, it decided to sell its TouchPad for $99, a move that sparked huge demand for the tablet. It is unlikely, however, that RIM will offer such deep discounts since it has long-term plans for the tablet business.

RIM declined to comment directly to the inventory number, but reiterated its confidence in the PlayBook.

"We strongly believe that the tablet market is still in its infancy and we remain committed to the BlackBerry PlayBook and the QNX OS," a company representative said in a statement e-mailed to CNET.

The Guardian report was spurred by a story by Taiwanese trade paper DigiTimes, which reported that Quanta was cutting its staff by nearly a third in northern Taiwan to less than 2,000. Fubon Securities analyst Arthur Liao told the Guardian that Quanta's Taiwan factory specifically focused on RIM production.

The PlayBook couldn't have gotten off to a worse start. The product launched without its own access to e-mail, contacts, and calendar and relied on a BlackBerry to act as a "bridge," a decision that elicited a lot of criticism. RIM's claim that carriers would sell the device irked its traditionally strong partners, and AT&T and Verizon Wireless backed away from the PlayBook. Sprint Nextel recently scrapped plans for a WiMax PlayBook.

Still, Lazaridis expressed hope last week that sales will pick up. Beyond the price cuts, he pointed to the 2.0 version of the PlayBook software, which would include its own e-mail, calendar, and contacts function, as well as access to Android apps, as another catalyst.

Updated at 12:39 p.m. PT: with a comment from RIM.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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