Research in Motion to Take $485 Million Charge for PlayBook

Mobile manufacturer, Research In Motion (NASDAQ:RIMM) stated it would record a pre-tax provision in Q3 of $485 million, $360 million after tax, related to its inventory valuation of BlackBerry PlayBook tablets. The charge is expected to be largely non-cash. As previously disclosed, RIM has a high level of BlackBerry PlayBook inventory.

The company now considers that an increase in promotional activity is required to drive sell-through to end customers.

Therefore, RIM will record a provision that reflects the recent market environment and allow it to expand upon the aggressive level of promotional activity recently employed by the company in order to drive PlayBook adoption around the world. RIM believes this strategy will accelerate adoption of its QNX-based platform by consumers and enterprises.

During the third quarter RIM sold approximately 150,000 BlackBerry PlayBook tablets and sell-through to end customers, based on RIM's internal data, was higher than this amount.

Research In Motion (NASDAQ:RIMM) has potential upside of 50.9% based on a current price of $18.58 and an average consensus analyst price target of $28.03.

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• Research in Motion
• PlayBook
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