RIM surprised by Kindle Fire pricing

Research In Motion was “blindsided” by Amazon’s decision to price the Kindle Fire at just $US200, a tech analyst has written.

The comment comes after RIM said earlier this week it still had hundreds of millions of dollars’ worth of unsold PlayBook tablets.

Sterne Agee analyst Shaw Wu told the Wall Street Journal that “our understanding is that RIM was blindsided by Amazon pricing its Kindle Fire aggressively at $1,999”.

“We estimate that the company is losing $50-$75 per PlayBook sold,” he said, noting RIM’s response, which was to slash hundreds from the PlayBook’s price.

In RIM’s latest statement, it said it “now believes that an increase in promotional activity is required to drive sell-through to end customers”.