RIM's BlackBerry-themed PlayBook faces anemic sales. Should RIM consider killing its tablet efforts altogether?
Should Research In Motion kill the PlayBook?
On Sept. 29, a rumor circulated that RIM was planning to
discontinue production of the 7-inch tablet, which runs the company's QNX-based
operating system. RIM shot that down as fiction, with a spokesperson telling Boy
that the company "remains highly committed to the tablet
But can RIM benefit from staying in the tablet market? Or
would it prove better for the company, in the longer run, to end production of
the PlayBook and devote those resources to other pursuits?
During the company's Sept. 15 earnings call, RIM co-CEO Mike
Lazaridis told media and analysts that PlayBook sales were "below where we'd
like it to be," but that the device would "ultimately be successful in a market
that's in its infancy." At the time, RIM executives promised that a major
software update would help fill in the PlayBook's feature gaps, including its
lack of native email; however, they neglected to mention when that would
This week, prominent retailer Best Buy slashed the PlayBook's price
by $200 for all models. It's anyone's guess whether that had anything to do
with Amazon debuting the 7-inch Kindle Fire tablet, which will retail for
$199.99 and offer easy access to the online retailer's multimedia and cloud
Based on RIM's frank admission of anemic sales, lack of a
roadmap regarding the software update and those price cuts, things are looking
a little grim for the PlayBook. RIM also faces broader troubles: for the second
quarter of 2012, the company reported revenues of $4.2 billion, a 15 percent decline
from the $4.9 billion it earned during the previous quarter. The company is
prepping a line of QNX-based "superphones" it claims will reignite consumer and
If RIM terminated the PlayBook, it could save the company
some cash in the short term. But longer-term,
that could have some negative repercussions. For one thing, killing the
PlayBook would double as a vote of no confidence in the QNX-based operating
system, on which the company has pinned the bulk of its hopes for a turnaround.
Also, killing the tablet would remove a significant element of RIM's hardware
ecosystem, hobbling its chances of competing on equal footing with Apple and
the various Google Android manufacturers.
If you subscribe to that theory, RIM has precious little choice
but to continue with the PlayBook for the foreseeable future.
Nicholas Kolakowski on Twitter