This May Not Be the Time to Write Off Research In Motion
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The way I see it, the chief problem plaguing BlackBerry maker Research In Motion (NAS: RIMM) seems to be the all-round pessimism surrounding the company.
And that's exactly why RIM should focus on providing existing and prospective users an experience showcasing the true flexibility and security that's a part of every BlackBerry product, rather than lowering prices in a desperate bid to hold its own against a slew of similar devices led by Apple's (NAS: AAPL) iPad. The Playbook upgrade may just be the first step in that direction. But first, a peek into what went wrong.
Something's just not right
One thing is for sure: Had RIM introduced the "upgrades" right from the product launch, the Playbook might not have been so massively undermined. I mean, isn't built-in email the order of the day for the tablet market? And everyone knows the price that the company paid for it -- only about 150,000 Playbooks sold in the last reported quarter -- a joke compared to sales of around 15.4 million Apple iPads in that period. Reason enough for RIM to hold its head down, right? Wrong. And I'll give you three good reasons for it.
Security, Android, price -- a winning combo
What comes to my mind when I look at a BlackBerry product? A business device where data security reigns supreme. That, I believe, is primarily what keeps a whopping 75 million subscribers hooked on its products. So why not cash in on that?
As Fellow Fool Evan Niu rightly pointed out, RIM should focus all its energies on winning back the enterprise segment, which should ensure it stays ahead in the race. And government support in the form of Federal Information Processing Standard certification should go a long way in that direction. RIM needs to increasingly focus on product security to stop losing enterprise customers to Apple.
And then there is Google's (NAS: GOOG) Android factor, something which RIM has recognized at last, as the upgraded version provides Android connectivity. With the company claiming more than 6 million daily downloads on its "App World" feature, the cross integration with Android should bring in more people within the BlackBerry circle of users.
And last but not least, in an effort to keep up with the competition and reduce its piling inventory, RIM was forced to slash prices of its Playbook, which should work out to its advantage, now that the tablet no longer falls in the "basic device" category. While some may argue that this undermines the product value, I feel that if RIM plays its price card well in emerging but cash-strapped markets, sales will ultimately pick up strongly.
Foolish last words
BlackBerry is in deep trouble at present; there's no doubt about that. But let's not forget that the Playbook has evolved into an affordable business device which is at par with, if not better than, others in the market. And with its foundations laid in the much-talked-about QNX-based operating system, this is one product which can still make a turnaround.
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At the time this article was published Fool contributor Subhadeep Ghose does not own shares of any of the companies mentioned in this article.The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and Google.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. 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.