Say Hello to a New $199 Tablet

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Just when you thought that's (Nasdaq: AMZN  ) Kindle Fire would be able to hog the entry-level tablet market all to itself, Research In Motion (Nasdaq: RIMM  ) is here with $199 PlayBooks.

The good news here is that the PlayBook has superior specs to the Kindle Fire in several important ways. It has twice the storage capacity. It comes with two more cameras than the lens-less Kindle Fire.

However, opportunistic buyers may be adopting an orphan. This offer is good for a "limited time" at select retailers, and at least one -- Wal-Mart (NYSE: WMT  ) -- has already sold out since yesterday's announcement. Wal-Mart is now down to the $299 32-gig units and $399 64-gig models.

Once these PlayBooks are gone, they may in fact be really gone.

After flopping at their original iPad-esque prices, RIM is delaying the seemingly necessary operating system update. RIM should have been an easy sell for its core business and enterprise users. As much as cynics love to rough up RIM, the BlackBerry maker still has a whopping 70 million accounts worldwide.

However, some glaring shortcomings -- namely a bone-dry apps ecosystem relative to Apple (Nasdaq: AAPL  ) and Google (Nasdaq: GOOG  ) and sorely lacking some obvious native applications -- made it a hard sell even to its hardcore fans. App developers go where the crowds are gathered, and right now that's iOS and Android. Why go QNX?

We also can't forget that Microsoft (Nasdaq: MSFT  ) , a seemingly forgotten player in smartphones and tablets, is ready to put up a fight.

However, RIM shouldn't have a problem clearing out PlayBooks at $199, just as Hewlett-Packard (NYSE: HPQ  ) had no shortage of takers once it marked down its webOS tablets to as little as $99 in its seemingly "going out of business" sale.

Amazon will need to watch this closely. Apple may lose a few iPad 2 sales this holiday season. Amazon is able to sell its Kindle Fires at a loss because it's confident about making that back in digital sales. RIM appears willing to take an even bigger hit just because it wants to stay alive. Desperation creates deals that muddy up the landscape in the near term. Where RIM and its PlayBook will be next year is anyone's guess.

If you want to see how the battle plays out, follow the players by adding Google, Research In Motion, Microsoft,, and Apple to My Watchlist.

The Motley Fool owns shares of Apple, Google, Wal-Mart Stores, and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Apple, Wal-Mart Stores,, and Microsoft; creating a bull call spread position in Apple and Microsoft; and creating a diagonal call position in Wal-Mart Stores. 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.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for HP. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (2) | Recommend This Article (2)

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  • Report this Comment On November 22, 2011, at 1:01 PM, gskorich wrote:

    i have a feeling most buyers of the Kindle Fire will initially be ok with their purchase but when they realize is doesnt do what the ipad does we are going to see some sticker shock. 199.99 is a great starting point but even amazon admits it is selling it for less than it cost to make in hopes that peopel will buy books, movies, music? now there is talk about two new models of the Fire. would thse models also be missing the cameras and microphones in order to sell them? after all is said and done 499.00 for everything i want in a tablet is not a bad price for the ipad

  • Report this Comment On November 22, 2011, at 4:27 PM, RichardGetz wrote:

    Apple will have a $299 iPad 2 once the iPad 3 comes out and then all deals are off again.

    Similar to how the iPhone 3G is Free and the iPhone 4 is $199 the iPad will take over the lower end tablet market in 2012

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