Amid lackluster BlackBerry PlayBook sales, 1,000 production line workers have been let go at Quanta in Taiwan where the tablets are made. Quanta confirmed the layoff figures to DigiTimes, although the company didn’t comment on specific clients or activities of the former employees. The figure of 1,000 workers is estimated to be half of the total production resources used to manufacture Research In Motion’s tablet computer.
On its most recent quarterly investor call just last week, RIM reported shipping a scant 200,000 PlayBook tablets. In the prior quarter, the first one that included PlayBook shipments, the company shipped 500,000 units. Bear in mind that shipped doesn’t mean sold and the company hasn’t yet said how many tablets have actually been sold. Regardless, there’s a few problems here.
In a fast growing tablet market, PlayBook shipments should be growing, not shrinking. DigiTimes sources indicate that RIM expected to build and ship between 4 and 5 million PlayBooks in 2011, but it’s clear that the actual figure will be a small percentage of that number. And QNX, RIM’s future operating system for phones, is the featured platform for the tablet; if it fails to impress or doesn’t sell devices, the company is at risk for losing momentum before it ever gets QNX on BlackBerry handsets.
And the company’s plan to run future phones on a QNX-powered platform makes sense, but RIM bought QNX in April of 2010 and there are still no handsets announced for the new operating system. Instead, new Bold handsets are the latest offerings announced; they appear delayed and will run a new version of BlackBerry OS, not QNX. They’re also not expected to be upgradable to QNX either.
As it stands today, it appears that the company tried to jump in to tablets first in order to leverage the market’s fast growth. But as Google Android Honeycomb tablets have illustrated, you can’t simply show up for the race and expect to win. It takes a full-featured solution, a broad ecosystem, and smart marketing to gain sales. And as much as the tablet market is growing, it is still dwarfed by smartphone sales.
RIM would have gained more bang for the buck if QNX was first put on its smartphones. Instead, it appears that the first run of the PlayBook is a relatively lost cause for the company and it will have to hope that software updates are enough to have consumers take a second look at RIM’s first tablet.