Say Hello to a New $199 Tablet

Just when you thought that Amazon.com's (NAS: AMZN) Kindle Fire would be able to hog the entry-level tablet market all to itself, Research In Motion (NAS: 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 (NYS: 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 (NAS: AAPL) and Google (NAS: 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 (NAS: 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 (NYS: 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 addingGoogle, Research In Motion,Microsoft,Amazon.com, andAppleto My Watchlist.

At the time thisarticle was published The Motley Fool owns shares of Apple, Google, Wal-Mart Stores, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Google, Apple, Wal-Mart Stores, Amazon.com, 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 servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributorRick Munarrizcalls 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 theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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