Taiwanese manufacturer Quanta Computer is being forced to lay off around 1,000 workers as RIM scales back on production of its flailing PlayBook tablet.
With a purported 800,000 PlayBooks gathering dust in RIM's basement, the Canadian BlackBerry maker seems to have sensibly decided not to keep churning them out until it can figure out how to shift the inventory.
While that sounds sensible, it may be harder to actually achieve, however, seeing as RIM only managed to ship 200,000 last quarter.
A spokesperson for Quanta confirmed cuts to Taiwanese daily DigiTimes but didn't specify that the staff layoffs came directly from the RIM production line.
However, analysts close to the firm have been able to make the connection, based on Quanta being RIM's device assembly partner and the rapid pile up of RIM inventory as declared in the firm's financial results.
Executives are now wondering what to do to get rid of the surplus, though RIM might do well to take HP's fire sale under consideration. According to component analyst IHS iSuppli, the bill of materials on the PlayBook is $271, so selling it off at $299 would be a great strategy which doesn't even shortchange the firm.
As HP proved when it sold off its TouchPad for a quarter of its original price, people will buy a bargain if you give them half a chance.
It's time for RIM to stop being snobby, suck it up and sell the stock off cheap, before re-evaluating options for any future tablet releases.