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With Research In Motion’s share of the U.S. smartphone market eroding and Apple poaching key sales employees, analysts look to the PlayBook tablet to save RIM from being slowly squeezed to death in the mobile market.
RIM unveiled its PlayBook Sept. 27 at its annual DevCon conference as an enterprise-oriented alternative to Apple’s iPad and Samsung’s Galaxy Tab, an Android 2.2-based tablet.
Based on RIM’s new QNX operating system instead of BlackBerry OS, the 7-inch PlayBook supports Adobe Flash and HTML5, multitasking, and high-definition video, and sports front and rear cameras for video conferencing.
Noting that shares of RIM stock have increased 21 percent since the company unveiled the PlayBook, Susquehanna Research analyst Jeffrey Fidacaro boosted his target price for RIM to $45 from $38 and said he expects RIM to sell 8 million PlayBook tablets at $459 per unit by 2012.
Boosts to RIM’s stock share surely can’t be from its BlackBerry smartphone sales.
While RIM is still the U.S. smartphone leader, Apple’s iPhone and handsets based on Android have been nipping at its share. RIM saw its third-quarter shipment share slip to 22 percent from 28 percent in the second quarter, according to NPD Group.
Fidacaro seconded this in his Nov. 30 research note, adding that while he sees solid shipment trends for the BlackBerry Torch, 3G Curve and Style, “we continue to flag RIM’s deteriorating smartphone market share in the U.S.”
It certainly doesn’t help that Apple is stealing RIM’s corporate sales team members for both the iPhone and iPad, or that Apple CEO Steve Jobs brazenly called out RIM for being whipped by his own company.
Expecting the PlayBook as a savior for RIM is no sure bet. There are many mitigating factors, not the least of which is that the device will be entering something of a Wild West market for tablets when it arrives next year.
While the iPad commands more than 90 percent of the market, Fidacaro expects more than 50 tablets to be unveiled at the Consumer Electronics Show alone in January. Expect an iPad 2, dozens of Android tablets, and WebOS and Windows 7 tablets in 2011.
Furthering dampening hopes around the PlayBook is the fact that it will not have a 3G option at launch. Without a data plan from a carrier, akin to what Apple and Samsung have done with their tablets, it’s fair to question RIM’s go-to-market strategy.
Adding insult to injury, JP Morgan & Chase is giving iPads to its corporate investment bankers, normally RIM’s target audience with the BlackBerry.
“Since I still can’t find a single person that actually wants a Playbook, I’m sure not counting on that product,” industry analyst Rob Enderle told eWEEK.
“Apple defined the tablet space. RIM hasn’t been very competitive with smartphones against Apple and they had a massive lead. With tablets they are starting behind. In a race if a runner can’t stay ahead of the competition when given a substantial lead, there is no chance they can win if starting well behind.”
What does this all add up to? Enderle said RIM is executing a five-year plan to fail in the market and is on year 2 of that plan.