Are RIM Ready To Drop The PlayBook?

RIM BlackBerry PlayBook

Research in Motion (RIM), the makers of the city-folk’s best friend, the BlackBerry, are rumoured to be halting production of their PlayBook tablet just a year (almost to the day) after launch. The QNX-based tablet has failed to make a dent into the iPad’s leadership in the market, and whilst Blackberry claim to have shipped 500,000 PlayBooks in the last six weeks of its fiscal first quarter and another 200,000 in its full second quarter – they do not give numbers for actual sales. Indeed, retailers have already started slashing the price of the PlayBook in a possible attempt to shift growing inventory.

Yesterday, Collins Stewart semiconductor analyst John Vihn noted that Quanta computer had started laying off workers involved in the production of the PlayBook, and wrote:

We believe RIM has stopped production of its PlayBook and is actively considering exiting the tablet market…[and] our due diligence indicates that RIM has canceled development of additional tablet projects.

In response to the rumour, RIM spokeswoman Marisa Conway made a statement saying:

Rumours suggesting that the BlackBerry PlayBook is being discontinued are pure fiction. RIM remains highly committed to the tablet market and the future of QNX in its platform.

Ever since HP sold of its TouchPad tablets in a $99 firesale last month, any sign that a manufacturer has been unable to meet expectations with their tablet sales has resulted in rumours like these currently focused on RIM. Whilst it is difficult to know for sure how much weight to place on these stories, the likelihood is that most manufacturers will not move out of a new fast-growing market area within 12 months of joining it, after their first effort is simply not gaining the customers they would have hoped. Financial results may be being reported in the US every three months, but a technology business has to be able to look much further ahead and stay its course over a few bumps if it wishes to be successful.

That said, Amazon’s recent Kindle Fire tablet bears more than a striking resemblance to the BlackBerry PlayBook – something which is due to both companies outsourcing much of the product design to ODM Quanta, with both tablets sharing many similarities inside and out – but with Amazon cutting a few corners and shaving a lot off the price. The Fire’s release, in fact, is very likely what prompted RIM to slash the price of each PlayBook model by $200 across the board – as there was suddenly a very similar tablet out there for just $199 (with the cheapest RIM model previously priced at $499). If anything, the excitement around both HP’s $99 firesale and Amazon’s $199 Kindle Fire – is that people do *want* a tablet for simple tasks like surfing the internet in the living room in front of the TV, but unless you can compete with Apple on brand, the breadth of apps, and claims of productivity improvements – then you need to keep the price under that magic $250.

[via Reuters]

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