From smartphones to tablets, Research In Motion
And RIM's bad news continues as senior managers choose to call it quits. Tyler Lessard, vice president of global alliances and developer relations, has announced his intention to leave, and Ryan Bidan, the PlayBook product manager himself and one of the key players in the tablet's launch, has already moved on.
To top it all off, RIM's shares have dropped by a whopping 64% over the past year. Is there any hope left?
Tumbling from the edge
For the quarter ended in August, RIM managed a shipment of just 200,000 PlayBooks -- less than half the units it moved in the previous quarter, not to mention a pittance next to Apple's shipment of an eye-popping 9.3 million iPads.
The first thing RIM has to do is work on a better price differentiation strategy. For instance, Amazon has priced its Kindle Fire at $199, while a 16 GB PlayBook goes for between $200 and $299 at Best Buy
A related issue is RIM's marketing and advertising message. RIM tends to target its corporate customer base, but while the company calls the PlayBook a "professional tablet," the device includes things like games and access to videos and music -- things that would please a student. The marketing strategy may have been influenced by RIM's worldwide subscriber base, which is increasingly dominated by non-corporate consumers, but if RIM wants to grab a fair share of consumers, it has to establish a clear marketing campaign that targets tablet users as a whole.
Around five years ago, RIM had 48% of the smartphone market. Now it's down to 11.6% while Google's Android system and Apple's iPhones have grabbed most of the market. Nevertheless, I still wonder whether RIM can pull off another successful application like the BlackBerry Messenger. If so, maybe it can still work the same magic on the PlayBook.
Foolish bottom line
Lack of competitive pricing, delayed product shipments, and an ambiguous marketing strategy have taken their toll on the company's profitability, which in turn is reflecting on RIM's shares. I'll wait for a PlayBook with more engaging features; until that happens, it's better to keep this company on your watchlist.
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Fool contributor Vibhuti Shah owns no shares of any of the companies mentioned in this article. The Motley Fool owns shares of Apple, Google, and Best Buy. Motley Fool newsletter services have recommended buying shares of Amazon.com, Apple, and Google, creating a bull call spread position in Apple and writing covered calls in Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.