Update: RIM says it’s not killing the PlayBook and that the company remains “committed to the tablet market.”Â
Research in Motion’s BlackBerry PlayBook is a nice looking little tablet with a 7 inch, 1024 x 600 pixel display and a speedy 1 GHz TI OMAP4 dual core processor. In fact, Amazon apparently liked the design enough that it contracted with Quanta, the Taiwanese manufacturer of the tablet to build the $200 Amazon Kindle Fire. The two tablets look almost identical.
But there are a few key differences. The Kindle Fire is an inexpensive device that’s bundled with Amazon’s digital media stores as way to give users an excuse to buy music, movies, apps, and eBooks from Amazon, while the BlackBerry PlayBook is a $500 general purpose tablet that’s gained little traction in the market.
Amazon expects to sell hundreds of millions of Kindle Fire units. RIM has likely only shipped around 700,000 so far — and now there’s a rumor going around that the company may be pulling the plug on the tablet altogether.
Last week we heard that RIM had reduced its orders with Quanta, and now Barron’s reports that the company may have stopped production altogether.
We should probably take the news with a grain of salt, since it’s coming from an industry analyst and not from RIM executives. But apparently he did a little digging and found that Quanta simply isn’t making any more PlayBook tablets.
It’s possible that this just means RIM has an overabundance of tablets at the moment and needs to sell through them before placing orders for any new units. But with Quanta already reportedly laying offer workers, the future for this 7 inch tablet doesn’t look all that bright.
RIM officials launched a two-pronged approach to drum up BlackBerry PlayBook sales recently. First, there are promotions underway that let you pick up the tablet for as little as $300 from several retailers in the US and Canada. The company is also expected to roll out a software update in the coming weeks which will add support for native email, calendar and contact apps as well as some Google Android applications.
Even if the PlayBook is effectively dead, RIM could still launch another tablet in the future, or take another approach to try to gain ground in the tablet space, but the Barron’s report says future tablet plans may also be cancelled.
Honestly, maybe it’s time to call it quits. At this point few companies that aren’t called Apple are thriving in the tablet space.
Last year, after Apple’s iPad started selling like hotcakes, it made sense for every consumer electronics company on the planet to develop a tablet to try to get in on the fun. But at this point it’s not clear whether there’s a massive demand for tablets… or just for iPads.
Some niche devices, such as the Barnes & Noble NOOK Color seem to be selling well, and I suspect the Amazon Kindle Fire may do well for the same reasons — neither device is trying to beat the iPad at its own game. And overall Android tablet market share may continue to grow slowly as Google and its hardware partners refine their designs. But I’d be surprised if there’s a single non-Apple device maker that will make a huge splash in the general-purpose tablet space in the next 12 months — especially by going it alone and using an operating system developed in-house.
HP clearly decided that it couldn’t pull off that trick, and canceled the HP TouchPad tablet after just 45 days on the market. RIM’s PlayBook has been around a little longer than that, but sales have been similarly sluggish.
Update: Although RIM says it’s not pulling out of the tablet space, the company still has a tough road ahead of it and the recent price cuts may just be the first step in either turning things around… or signalling the beginning of the end.Â
via Business Insider
Or perhaps they should take the lesson the PC industry already knows. Only Apple can command Apple pricing. Every name brand tablet has been priced in the iPad range and every one has suffered disapointing sales.
We have been told ARM is less expensive than Intel. They also tend to be SoC solutions. They have less stuff inside, no hard drive, no Windows license. Yet a 10″ tablet always seems to cost more than a 10″ netbook. Usually a lot more unless there is a cell carrier subsidy and contract involved.
Then you have Google playing games, withholding access to Android 3.x from the cheap Chinese manufacturers. But that should stop with the release of 3.2’s source.
And now Amazon has lowered the bar to $200. No reason any other tablet vendor can’t sell similar kit with a generic Android interface in that price range other than still believing that if they can hit the magic design and ad campaign they can get in on those sweet sweet 50% Apple profit margins. As soon as they give up on that the game is going to be ON.
Dunno about this; the big driver is cost of manufacturing. Â “A 10-inch tablet always seems to cost more than a 10-inch netbook” because solid-state storage and touchscreens cost the manufacturer a lot more than spinning hard disk drives, non-touch LCD panels, and keyboards; the presumably cheaper price of ARM and Android vs. Intel Atom and Windows 7 Starter isn’t enough to make up the difference.
As for comparisons with Apple, my understanding is that, by being the first in line with really big orders to component suppliers, they have locked in both greater supply and lower pricing on such components, which helps them reap a bigger profit margin than competitors on comparable hardware even at the same price. Â Moreover, I have read analyses (I’m not equipped to evaluate their correctness) that claim that Apple’s control of both software and hardware enables them to get a given level of performance out of lesser hardware, especially RAM; if true (and I’ve not had problems with lack of responsiveness on my original iPad, though it has less RAM than some other tablets for which I _have_ read complaints about responsiveness), this would also reduce Apple’s cost of manufacturing for a given level of performance. Â So even accepting lesser margins, it’s doubly hard for other manufacturers to match Apple on price without cutting corners on components (e.g., non-IPS or non-capacitive touchscreens).
Finally, as for Amazon having “lowered the bar to $200,” well, again I’ve read analyses saying their cost to manufacture is about $180, which would leave very little profit after development and advertising costs and the like.  It appears that Amazon is doing a “printer and ink” or “razors and blades” business model, where they sell the hardware pretty much at cost (or below, as in “PlayStation 3 and games”) in hopes of making a profit on “supplies,” in this case just about everything else they can sell through the tablet.  Hard for _anybody_ else, including Apple, to do that in competition with Amazon.com; I expect that $200 is (for now, until component prices come down) below the price anybody else could get away with charging for a 7″, dual-core, 8 GB, IPS, capacitive-touchscreen tablet.  Of course, you can find even 10″ tablets advertised on this very site for less than that; but what corners were cut to achieve those prices?  Android vs. Windows, and ARM vs. Intel, are the least of it.
Yes, good points. The Playbook base model costs RIM about $273 to make. While the Kindle File is basically based on the Playbook, same manufacturer was used, except they stripped out quite a lot of the amenities.
Like the KF has no Bluetooth, no HDMI port, no G-Sensor, no microphone, no cameras, no physical volume buttons, no GPS, no memory card expansion, and has only 8GB of internal capacity versus the Playbook’s minimum of 16GB for the base model.
So it’s not so simple that other companies will be forced to match Amazon’s pricing when they are giving you less for the price. Though forcing a smaller profit margin is more likely to happen, but the only way many will be able to match the $200 price point is to similar strip features and capabilities.
While few companies can compensate with alternate revenue sources to make up for the loss of profits.