Research In Motion (Nasdaq: RIMM) teased its new Playbook a few days ago and it looks good on paper, but I have yet to find anyone that actually wants one. A number of folks think it looks like a good product and, I agree, it has potential. But what's the point if no one really wants to buy it? Is this because Apple (Nasdaq: AAPL) does such a good job of setting the bar, and alternative products just don't seem to carry much interest?

I want an iPod!
Ever since the iPod launched, I've heard a number of stories from parents who were convinced by sales people that another MP3 player was better. Microsoft's (Nasdaq: MSFT) Zunes, at least the second and third generation products, were as good or better on spec, for instance, but when they gave their child the non-iPod product, they often were greeted by tears and disappointment, because the child had asked for and wanted an iPod, and nothing else would do.

Better is something that exists as a perception. What I or you think is better doesn't matter if the person we want to impress with a gift doesn't agree. This is largely how Apple got to own more than 80% of the MP3 market. People came to believe that nothing else but an iPod would do, and from developers to accessory providers, the result was an ecosystem that is unmatched in the segment. The belief eventually turned into reality. Today, there is no MP3 player, from the standpoint of total solution, that is better than an iPod.

iPad Halo
The iPad is starting out like the iPod did. It doesn't have an insurmountable lead yet. However, it already has a reputation for being near magical in its capabilities. The only other product that seems to have anywhere near the level of reputation in a related class of product from another vendor is the Kindle, and even though both products are restrained by manufacturing limitations at the moment, you can see a hefty accessory and application ecosystem growing up around the iPad that no Kindle currently shares.

The result is that, when it comes to tablets, people are rapidly locking down on the idea of the iPad, much like they did on the iPod, as the prefect tablet and, if the majority of the buying public does this, it is unlikely any other product -- no matter how well-built or provisioned -- will be able to take the leadership that the iPad created.

Closing Window
However, the iPad is leading largely by perception at the moment, and Apple is doing a good job hiding, much like they did with the initial iPod, the initial iPad's limitations. These include the inability to use the product outside (something the Kindle is successfully marketing against), relatively few accessories, and relatively (compared to the iPhone and iPod touch) few killer applications. In addition, the device currently lacks cameras, the related 3G services won't allow video, and docking only works in portrait mode rather than the preferred landscape mode, if you want a physical connection. Oh, and the product costs about twice what it eventually will once it becomes cost optimized. Recall the initial iPod? It had no video, held 5 GB, and cost nearly the same as the iPad. The second generation of the iPad will likely address many, if not most of these shortcomings, so this vulnerability won't last forever, but while it does, Apple does have an exposure.

RIM Playbook Opportunity
So the RIM PlayBook, which is more portable, has a lower price, has twin cameras, has better connectivity to the web, better video wireless capability, and native Flash support, and it is largely designed to do well in many of the disciplines the iPad does poorly. However, all these things make little difference if people hold up the iPad as the bar and penalize the PlayBook for why it is different rather than credit it with why it is better.

To do the latter, RIM has to market at Apple's levels, and while RIM has created a compelling piece of hardware -- it even tethers making better use of a smartphone's existing data plan -- RIM has never demonstrated a capability to position itself competitively well against an Apple product.

Their latest phone, the BlackBerry Torch, tried and failed to be perceived as an iPhone killer. By trying to position that phone against the iPhone, RIM strengthened Apple's case, because it helped Apple set the iPhone as the bar and the Torch is simply no iPhone. It has a number of differences that could be advantages, but not if people see the iPhone as the gold standard. RIM, in the way it spoke about the Torch, played right into Apple's hand.

The Apple Competitor's Dilemma
RIM has what could be a winning alternative to the iPad, but only if it is seen for its relative strengths and not its relative differences to the gold-standard iPad.

Like most Apple competitors, by constantly bringing up the Apple products and positioning itself against the same set of multi-media based use cases that define Apple's offerings, RIM simply looks lame. Only the Verizon Droid has done a good job of having people look at the iPhone differently, and much like it is in a political fight against an incumbent, the Droid has stood out as one of the few Apple competitive successes.

If RIM and others (the well-differentiated Windows Phone 7 products will be arriving shortly) can't rise to the challenge of having their products seen as true alternatives rather than crippled Apple clones, they won't rise to their full potential, and my inability to find someone who wants to buy the RIM PlayBook for themselves and the poor sales of most iPod competitors is the failed effort that will likely be the result.

Ctech

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