When Research in Motion released its dismal first-quarter earnings last Thursday, it cited as one of the few bright spots the 500,000 PlayBooks shipped since the tablet's debut on April 19.
Now that bright spot appears to be darkening fast.
RIM...has downward adjusted its internal [PlayBook] sales target for the second quarter, from 2.4 million units originally to 800,000-900,000 units, according to sources from Taiwan-based supply chain makers.The sources pointed out that the PlayBook achieved strong sales of 40,000-50,000 units on its launch day, but demand from then to mid-April was lower-than-expected.
It should be pointed out that RIM said it shipped 500,000 PlayBooks in the first quarter. That's far different than retail sales. If RIM wants to clear up any confusion, we're all ears.
(Also see: How come no one goes to jail for 'cramming'?)
The PlayBook launch has been a disaster, plagued by poor reviews and customer complaints. The current three models must be tethered to a BlackBerry smartphone to download email and only support wi-fi. All that's supposed to change later in the year, when new versions are expected to support 3G, LTE and WiMAX, but by then it might be too late in terms of market acceptance.
Yet optimism springs eternal to some analysts. According to MarketWatch, an analyst at Macquarie Capital on Wednesday initiated coverage of RIM with an outperform rating:
In a note to clients, analyst Kevin Smithen acknowledged “numerous challenges” for the company, including “delayed product launches, insufficient and misallocated R&D, poor management reaction to changing industry trends, subpar communication with investors, strengthening competition, falling [average selling prices], and ineffective CEO and Board structure.”
Well, that description has "outperform" written all over it!
Smithen's rationale for his rating is that RIM will be able to offset its disintegrating market share in the U.S. with international sales.
Shares of RIM (NASDAQ: RIMM) were down 45 cents, or 1.6 percent, to 28.10 in late-morning trading Wednesday.