RIM's PlayBook Tablet in Desperate Need of a Price Cut
Research In Motion has put itself in a bit of a pickle with its BlackBerry PlayBook tablet. RIM launched the device before it was fully cooked and it jumped into the mobile fray missing critical features like native email, calendar, and contacts support. In our review of RIM's tablet, we concluded that "unless and until RIM finishes fleshing out the PlayBook, there's no reason to buy it." Turns out we weren't the only ones who felt that way.
A report in the U.K.'s Guardian suggests that RIM may be sitting on as many as 800,000 unsold PlayBook tablets. Let's put that number in perspective. According to RIM's second quarter financial report (PDF), it shipped 200,000 tablets in Q2 and 500,000 in Q1. Demand isn't yet at a standstill, but it's certainly slowed to a craw and now RIM is sitting on as many as 100,000 more tablets than the total shipped to date.
The situation presents a dilemma for RIM. An upcoming software update will address many of the PlayBook's shortcomings, but will it be enough to turn the tide? RIM is competing in the 7-inch tablet category, a category that's about to be fiercely fought with aggressive price points. It's rumored Amazon will release a $250 tablet, and Velocity Micro is getting ready to sell updated Cruz tablets for $240 (8 inches) and $300 (10 inches).
A price cut would go a long way in RIM's ability to compete with these and other moderately priced tablets, especially after it rolls out a software update and adds basic functionality that should have been included at launch. If we've learned anything from HP's TouchPad fiasco, it's not that there's no demand for non-iPad tablets, it's that the demand is there, if the price is right. That's not to suggest RIM should slash the PlayBook to $99, but at $300 (marketed at $299) or even $350 (marketed at $349) the PlayBook becomes a compelling buy. It's a decision RIM needs to make quickly, because if it waits too long, the PlayBook will become just another overpriced, last generation tablet instead of an overpriced, current generation slate.
Thoughts?