RIM's PlayBook Takes a Page From TouchPad's Playbook

Ah, the sad life of being a tablet that's not an iPad. Sitting on shelves, trying to coax buyers into taking you home with price cuts and broken promises with limited success.

The latest contender to get a price drop is Research In Motion's (Nasdaq: RIMM  ) poorly received PlayBook. Electronics retailer Best Buy (NYSE: BBY  ) is launching a Labor Day sale in an attempt to move some units. The 16GB and 32GB models get a modest $50 discount, and the 64GB model gets a larger $150 cut.

The oddest part of the discount is that it puts the 32GB and 64GB model both at the exact same price of $550. Let me say that again: the exact same price. Someone must have been asleep at the pricing desk there. Why would anyone buy a 32GB model when you can upgrade to double the storage for the no-brainer cost of zero?

Although the price cuts aren't permanent -- yet -- or as aggressive as Hewlett-Packard's (NYSE: HPQ  ) TouchPad sale, the underlying story is still the same: Apple (Nasdaq: AAPL  ) owns the tablet market. At least HP got the idea fairly quickly that it was fighting a losing battle and decided to throw in the towel. RIM's PlayBook is destined to face a similar fate.

A recent report from Digitimes claims that weak PlayBook sales had led the Canadian gadget maker to lower second quarter internal sales targets from 2.4 million units to between 800,000 and 900,000 units -- less than half. The company also disclosed that it had only shipped 500,000 Wi-Fi models in the first quarter. Keep in mind that "shipped" is different than "sell through," and some of these units haven't made it into the hands of end users.

I still think Amazon.com (Nasdaq: AMZN  ) is the only player that stands a chance once it enters the Android tablet market. What do you think? Can anyone compete against the iPad? Share your thoughts in the comments box below.

Fool contributor Evan Niu owns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Research In Motion, Best Buy, and Apple. Motley Fool newsletter services have recommended buying shares of Amazon.com, Best Buy, and Apple, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 03, 2011, at 10:55 AM, artlaz wrote:

    I think the primary victims of a successful Amazon tablet with be the other competing Android tablets. They'll be taking a big piece out of the "other-than-Apple" tablet pie, but not much effect on iPad sales.

  • Report this Comment On September 03, 2011, at 11:33 AM, H3D wrote:

    "Why would anyone buy a 32GB model when you can upgrade to double the storage for the no-brainer cost of zero?"

    Because they've only got a handful.

    So you go in to buy a 64G, and maybe when they haven't got any, you buy the 32G rather than leave empty handed.

  • Report this Comment On September 03, 2011, at 12:45 PM, cbglobal wrote:

    Funny how 500,000 units in the (partial) first quarter (only two months) was seen as fantastic at the time; and now is "only" 500K.

    Do I sense another negative bias? I don't see where RIM gave any forecasts at all. So you must be making up the rest of the story.

    This is also a Best Buy back to school promotion. I do not see where RIM was involved in the decision.

    Sad how your once cute name (Fool) has become an accurate description.

  • Report this Comment On September 03, 2011, at 12:48 PM, cbglobal wrote:

    Correction. The Playbook was only on sale for 6 weeks in the first quarter. So RiM sold 500k in 6 weeks (and only in the US and Canada).

    Do your homework. It took me 30 seconds to check.

  • Report this Comment On September 09, 2011, at 2:15 PM, chadscards1274 wrote:

    Up front let me say I don't own any RIM shares and don't plan to. Now that's out of the way whether anyone likes it or not there just isn't the same ecosystem for the Playbook as their is for the iPad or even Android tablets. The bottom line is if I'm the average consumer and I know I can buy an iPad 2 for $599 for a 32GB or I can spend $550 and get a 32GB playbook (or even a 64GB) I'm likely thinking the iPad 2 first. The reason - brand equity and apps. Everyone of the competitors to the iPad leads with hardware functionality, GB, HDMI output, USB plug, blah, blah, blah. The reason the iPad sells is because Apple gives people an idea of what they can use it for and the brand is laser focused. Showing apps in commercials, promoting apps on the iTunes store. Think about it when was the last time you heard an iPad commercial where it said anything about how many GB? Like it or not there are alread millions more iPad users then Playbook users. Developers go where the users are, this competitive advantage may take years to overcome if ever.

    The lesson, if you want to sell a tablet to compete against Apple, either get a better app ecosystem or sell it so much cheaper that it can be more of an impulse purchase. I honestly think that given Google just took out Motorola that the Xoom tablet has a better chance then the Playbook. We'll see how the AMZN rumored tablet comes out, but I agree that the AMZN tablet probably takes most of the Android market and just a little of the iPad market.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1548416, ~/Articles/ArticleHandler.aspx, 9/16/2014 1:43:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement