The PlayBook Joke Is on RIM
Stop me if you've heard this one before. A struggling tablet with ambitious dreams of taking on Apple's (NAS: AAPL) iPad walks into an online store and asks the shopkeeper for advice on how to jumpstart uninspiring sales.
Oh, so you have heard this one before. I guess we can just skip to the punchline: a massive price cut. Unfortunately, the company making the beleaguered gadget is the butt of the joke. Research In Motion (NAS: RIMM) should be used to it by now, anyway.
The BlackBerry maker is now selling all three PlayBook models for $299. That's right, the same price for the 16 GB, 32 GB, or 64 GB models, which results in discounts of $200, $300, and $400, respectively. Last time, third-party retailer Best Buy (NYS: BBY) had a similar sale with the two upper-end models also at pricing parity, which was four short months ago. The discount back then maxed out at $150 when buying the 64 GB PlayBook for $550.
This must be what the company meant when it said that "an increase in promotional activity is required to drive sell-through to end customers," even if the price points are nonsensical. The latest sale, which is available directly from RIM, goes for about another month, just in time for twice-delayed PlayBook OS 2.0. The software update will bring luxuries like native email and calendar apps along with Google (NAS: GOOG) Android support, assuming it isn't delayed again.
I'm still scratching my head on how RIM can justifiably call it a "truly uncompromised tablet experience."
Presumably, the sale will end and prices will jump back up to iPad-esque levels of $499, $599, and $699 right before the PlayBook is infused with basic features that virtually any tablet user takes for granted, which is nearly a full year after its debut and the iPad 3's arrival is likely imminent.
In the meantime, Amazon.com (NAS: AMZN) already offers a device that looks identical (because of a shared third-party manufacturer), has a superior integrated content ecosystem along with said basic features, and is available for $199 before any discounts. Oh, and a Kindle Fire 2 may also be imminent.
Good luck trying to jack those prices back up, RIM. The handful of prospective PlayBook buyers already know they just have to wait a few months before you kick prices back down again, and one of these days they'll have to stay down for the count.
Research In Motion is on a crash course and has left the mobile party prematurely, which is a shame, because the mobile revolution is going to be huge. But just because RIM is missing out, that doesn't mean you have to. We've just released a brand-new, 100% free report that details one stock that is in an enviable position powering the mobile Trillion-Dollar Revolution from the inside, while also having exposure to China's red-hot growth. I like the stock so much I've given it an outperform CAPScall. Grab the report now to find out what company I'm talking about.
At the time this article was published Fool contributorEvan Niuowns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Amazon.com, Google, Apple, and Best Buy.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com, Apple, and Google, writing covered calls in Best Buy, and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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