RIM PlayBook discounts to go global

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RIM PlayBook discounts to go global

Slashing prices 'boosts demand'.

Research in Motion will expand "aggressive" North American price promotions for its PlayBook across the globe.  

The Canadian handset maker disclosed on Friday it would take a $485 million hit in the quarter to November due to the cost of clearing out its PlayBook stockpile.  

It hasn't outlined what promotions it will use in non-American markets but if it replicates the existing strategy, Australians could see significantly lower prices come through.

RIM has been gradually increasing PlayBook discounts in North America since September, with prices falling to $US199 a week after Amazon started shipping its Kindle Fire.  

These promotions were working, according to RIM, claiming to have sold at least 150,000 PlayBooks into the channel in the third quarter and a "higher amount" to consumers.

HP has already proved the effect drastic discounting can have on sales with its TouchPad firesale helping make it the second most sold tablet in the US last quarter

“Early results from recent PlayBook promotions indicate a significant increase in demand across most channels," said Mike Lazaridis, Co-CEO at RIM

"We look forward to continuing to grow the installed base of PlayBook users and to attracting more and more developers to expand the volume of applications, content and services that leverage the power of the industry leading QNX-based platform.”  

Shipment figures that RIM suggested on Friday would represent an uptick on the 200,000 it shipped in the previous quarter, when slow tablet sales helped drive up its inventory holdings by $400 million to $1.4 billion.

RIM's tablet sell-through programs were also behind lower-than-expected revenues for the most recent quarter, previously set at $5.3 billion to $5.6 billion. 

Despite the high cost the PlayBook has had on RIM, Lazaridis said it would not follow HP's footsteps in killing its tablet business.

“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy," he said.

"Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers that also offers unique security and manageability features for the enterprise.” 

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