RIM to take $485 mn charge related to Playbook tablets

BlackBerry maker Research In Motion on Friday said it would take a charge of $485 million in the third quarter of current fiscal related to inventory valuation of PlayBook tablets.

The Canadian major, which is grappling with stiff competition in the smartphone segment, also said that unit shipments would be lower in the fourth quarter as compared to third quarter (ended November 26).

Research In Motion (RIM) would record a pre-tax provision of around $485 million related to its inventory valuation of BlackBerry PlayBook tablets, which has elicited less encouraging response in the market.

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"The charge is expected to be predominantly non-cash," RIM said in a statement.

Noting that it has a high level of PlayBook inventory, the company said it believes that an increase in promotional activity is required to drive sell-through to end customers.

"This is due to several factors, including recent shifts in the competitive dynamics of the tablet market and a delay in release of the PlayBook OS 2.0 software," the firm said.

Stressing that tablet market is still in its infancy, RIM Co-CEO Mike Lazaridis said the company is committed to PlayBook.

Around 14.1 million BlackBerry smartphones were shipped in the third quarter.

"... based on preliminary estimates, RIM expects unit shipments in fourth quarter to be below third quarter levels.

"The lower expected shipments in the fourth quarter are due to several factors including lower than expected sell-through in the third quarter and RIM's current view of fourth quarter demand," the statement said.