Monday, January 9, 2012

RIM Slashes PlayBook Prices, Shakes Up Board

One of the biggest tablet stories of 2011 was the Hewlett-Packard TouchPad fire sale, which saw the failed device selling like hotcakes at $99. Now, Research In Motion is looking for something of a repeat performance in early 2012 with its latest pricing strategy .

Consumers who have been watching and waiting to see if RIM would slash the price of its struggling BlackBerry PlayBook are glad they did. RIM is offering its tablet devices -- regardless of whether consumers choose the 16 GB, 32 GB or 64 GB -- for just $299. That's down from prices of $499, $599 and $699, respectively.

The catch is you have to make the purchase through RIM's online store. This isn't the first time RIM has reduced the price on its PlayBook -- retailers cut PlayBook prices to $299 in September -- and industry watchers aren't sure it won't be the last. RIM wrote off $485 million in PlayBook inventory in the fourth quarter.

Too Little, Too Late?

It may be too little, too late for RIM with the Amazon Kindle Fire making waves and Apple reportedly readying to launch an iPad 3 and lower-cost iPad 2s. It may also be too little, too late for RIM's co-CEOs. Mike Lazaridis and Jim Balsillie have given up their co-Chairman roles, according to the Financial Post, an Ontario, Canada-based business newspaper.

What went wrong?

The PlayBook went on sale April 19. But it debuted with fundamental features missing, including a contacts database, a calendar, a chat application and a 3G or 4G connection, not to mention native e-mail. If you want all those features, you have to tether your PlayBook to your BlackBerry -- if you have a BlackBerry. The PlayBook only makes available 3,000 applications, compared with the iPad's more than 160,000.

"If RIM had come out with a fantastic, enterprise -class tablet, could that have been a way to compete with the iPad? Yes. Did RIM come out with a fantastic, enterprise-class tablet? Hell no!" said Avi Greengart, an analyst at Current Analysis. "I was astounded that RIM launched the PlayBook without a native e-mail client, and to this day there is no native e-mail client on the device. They promised it would be updated at the beginning of the summer and it's still delayed."

What Can Save PlayBook?

E-mail clients aside, will consumers flock to the $299 PlayBook the way they did to the $99 Touchpad? Greengart doesn't think so. As he sees it, PlayBook doesn't do much beyond Web browsing -- and that on a 7-inch display. On the upside, the operating system seems stable. But, Greengart quipped, that may be because it's not doing much.

The PlayBook 2 is expected as soon as February. Updated hardware may turn heads, but Greengart said the problem with PlayBook is software .

"If RIM does do a major update to the software and a major push around getting applications available for this device -- and does doing that concurrently with the new hardware -- it would be great," Greengart said. "But simply releasing a thinner, faster piece of hardware or even a larger screen sizes at this point, which is something they should have done in the first place, isn't going to help."

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