So it turns out a funny thing happens when you slash prices on a decent but not spectacular product: People buy more of them. It looks like 15 percent of Canadian tablet owners may now own a BlackBerry PlayBook.

BlackBerry PlayBook

The Globe and Mail reports that the PlayBook had just about 5 percent of the market share in Canada last fall.

What changed? Research in Motion dropped the starting price for the tablet from $499 to $199. The company insists that this is a temporary promotion, and we’ve seen prices go up and back down again repeatedly — but right now you can get a 16GB PlayBook for $199. The most expensive model is the 64GB version which costs just $299.

At those prices, it’s possible that RIM is selling some tablets at a loss. But the company is losing smartphone market share and mind share to iOS, Android, and other competitors. The more people RIM can convince to pick up a BlackBerry Tablet, the better its chances of keeping people in the Blackberry family.

Rumors have been flying around lately suggesting that Apple could introduce a smaller version of the iPad to compete with the Amazon Kindle Fire and other reasonably popular 7 inch tablets. But I think the fact that the PlayBook only really started to sell when it got cheap suggests that people aren’t picking up Amazon tablets because of their size as much as because of their price.

The Kindle Fire also costs just $199 — but that’s not the discount price, that’s what the Kindle Fire always costs. The BlackBerry PlayBook, on the other hand, may see a price increase soon.

RIM plans to launch PlayBook OS 2.0 this month, bringing native email, calendar, and contact apps to the tablet as well as the ability to run some Android apps, among other features. I wouldn’t be surprised if RIM tried increasing (or restoring) the price once that happens).

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5 replies on “BlackBerry PlayBook market share jumps after massive price cuts”

  1. Actually the 64GB costs $237 to build, so even if they lose 10-30  bucks on it they might think it’s worth it.

    After the OS 2.0 rolls out we might not see them again at these prices…

  2. I would wait until Apple’s March 7 announcement before buying a 7″ tablet.  It’s quite possible Apple is seeing the “millions” that Amazon
    is selling, much of which consists of Kindle Fires.  Apple may use its
    clout to change the market dynamics of 8″ and under tablets.

    Even an iPad Mini priced at $299 would negatively affect everyone else.

    1. A smaller iPad might not necessarily be a cheaper iPad. The iPhone is smaller than the iPad — but an unsubsidized iPhone costs around $600… or about the same price as an iPad 3G.

      The larger glass and case aren’t really all that expensive. I suspect if Apple does release a cheaper iPad it won’t just be smaller than the 9.7 inch models, but also have other cheaper features. 

    1.  No, actual build costs for just the 16GB model is $273.  So they’re selling them at a big loss now.

      While the Amazon Kindle Fire is basically based on the RIM Playbook, Amazon used the same manufacturing company, but it’s stripped down to near bare bones. 

      Even then, however, the Kindle Fire costs about as much to build as Amazon is selling it for and that means Amazon is selling either at cost or for a small loss.

      The thing to realize is that Amazon makes its profits from the services they provide and they don’t need to survive on the hardware sale profits like other companies do.

      Really, any other company can only reach $200 by reducing the quality and features of the tablet to be less than the Kindle Fire.  Anyone matching the Kindle Fire hardware has to charge more and any offering better hardware than the Kindle Fire have to charge significantly more!

      So don’t expect a Playbook quality device to sell for less than $300 unless it’s either a desperate gamble to boost sales with temporary loss or a going out of business fire sale.

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