Research In Motion (RIMM) slashed the price of its PlayBook tablet this year to compete with the dominant iPad. And now the company has paid the price.

The BlackBerry developer said Friday it will take a $485 million charge because it discounted the PlayBook so heavily. It previously cut the device's price to $200 from $500.

There's more bad news. The company said revenue for the quarter ended Nov. 26 will fall below its previous guidance of $5.3 billion to $5.6 billion. Part of that drop is due to a $50 million charge from a worldwide service outage that hit RIM in October.

In addition, the company said it won't hit its full-year guidance of between $5.25 and $6 in earnings per share. And finally, while RIM pleasantly surprised analysts by selling a better-than-expected​ 14.1 million devices in the quarter, the company said it will sell fewer BlackBerry devices in the fourth quarter.

Investors reacted badly to the announcements, taking shares down nearly 9% in morning trading to $16.97. With Friday's drop, RIM's share price has plunged more than 70% this year.

Clearly, the PlayBook is off to a dismal start, but Research In Motion needs to keep it alive. Apple's (AAPL) iPad is making inroads into the corporate world, claiming territory that RIM held for years. RIM needs to stop that drive, and the PlayBook, for all its flaws, is the weapon it's sticking with.

The Canadian company shipped 150,000 PlayBooks in the quarter but said the actual number sold to customers was higher since previous shipments were still on the shelves.

RIM needs to turn its focus to apps and the developers that make them. There aren't enough good apps on the PlayBook, and that must change for sales to improve. Designing apps for RIM's platform can cost three times as much as for other products, The Globe and Mail reported, because RIM has so many screen sizes and operating systems.

Investors are left with too many questions. How long can RIM take a loss on its PlayBook? Can it get the apps it needs? Can it make devices that buyers want? Can it effectively transition to its next-generation BBX operating system?

Analysts seem to have lost faith. Morgan Keegan lowered its price target Friday on the stock to $19. Earlier this week, the stock was downgraded to "underperform" by Sanford Bernstein and to "neutral" from Sterne Agee.

"We lack conviction on all fronts," wrote UBS analysts in a note to clients Friday about the stock.

Kim Peterson is an editor and writer for MSN Money's Top Stocks.