With sales of the BlackBerry PlayBook looking increasingly dismal, RIM is cutting production of its tablet.
According to a Digitimes report, PlayBook manufacturer Quanta Computer has plans to fire 1,000 employees in its Taiwan plant set up specifically to churn out the tablet. Quanta confirmed the layoffs and said it will offer preferential compensation to the ousted employees, but would not offer further details.
Digitimes said RIM had the factory set up in Taiwan rather than mainland China to avoid knockoffs. When RIM launched the PlayBook in April, the company estimated it would sell 4-5 million of the tablet. However, RIM shipped less than 800,000 units in the first quarter of 2011, and in the last quarter shipments only reached 200,000 of the 7-inch device.
While RIM hasn’t announced plans to kill the floundering PlayBook, Digitimes claimed Quanta opted to cut its losses and trim production in light of lackluster sales.
RIM’s tablet woes don’t stop there. The Guardian reported that the company is also sitting on a stock of around 800,000 unsold PlayBooks. If third quarter sales are any indication, it’s going to take RIM a long time to get rid of that inventory.
While Apple has found wild success with the iPad, other tabletmakers have struggled to make a dent in the market. Ironically enough, it wasn’t until HP announced that it would kill the TouchPad tablet and slashed the price on the device that sales picked up. However, it’s too late for that tablet; HP is only producing one more batch and is getting rid of its webOS platform.
RIM could be taking a cue from HP by kicking off a fire sale of the PlayBook. The Canadian company reportedly started offering discounts of up to 50 percent off the tablet to employees earlier this month.
Will RIM be able to save the PlayBook before it suffers a fate similar to the TouchPad? PCMag's lead mobile analyst Sascha Segan has some suggestions for how the company could breathe life into the struggling tablet as well as other parts of its business. But if sales don’t pick up, it could be the tablet graveyard for this device.