Research In Motion will sell its PlayBook tablet at almost exactly the same price as Apple's iPad 2 and in twice as many North American retail locations - a strategy designed to take consumers' focus off the price tag and on to the PlayBook's technical capabilities instead.
RIM's tablet will be available at more than 20,000 retail outlets across Canada and the U.S. starting April 19, the company announced Tuesday.
The PlayBook will initially come in three flavours. The entry-level model, with 16 gigabytes of memory, is expected to sell for roughly $500 (Canadian). The 32- and 64-gigabyte models will sell for $600 and $700, respectively. Apple's three WiFi-only iPad2 models, which have the same amount of memory as the three Playbooks, will sell in Canada for about $20 more. Pricing has been a challenge for Apple's competitors, many of which are selling their tablets for considerably more than the iPad.
With the iPad-comparable price scheme, RIM can focus on highlighting areas in which the PlayBook may be considered superior, such as its ability to handle Flash multimedia or more robust multitasking, said Deloitte technology analyst Duncan Stewart.
"What the PlayBook is going to be completely about is what can it do that no other tablet can do," he said.
Initially, the PlayBook will come only with WiFi capability, although BlackBerry users can tether their RIM tablets to their smart phones and share a data plan across both devices. ( Apple's iPad and iPhone also have a tethering option.) In addition to all Best Buy and Future Shop locations in the U.S. and Canada, the PlayBook will also be available for purchase through a number of major carriers, including Sprint, AT&T and Verizon in the U.S., and Rogers, Bell and Telus in Canada, RIM said. The partnership is beneficial to carriers because, even though the PlayBook won't come with a cellular data connection at first, the BlackBerry tethering option may convince some customers to buy bigger data plans.
"Visibility to the launch date is a positive because there was some media speculation that it would have been delayed," said Mike Abramsky, managing director of software and wireless research at RBC Dominion Securities. "Support from carriers is also a positive, given that this is actually a WiFi-tethered version as opposed to a 3G or 4G version, which I would expect in the fall."
According to Mr. Abramsky, the PlayBook will be available in roughly twice as many retail locations as the iPad 2 in the U.S. and Canada. Apple is expected to launch the iPad 2 in 25 more countries, including Canada, on Friday.
(There are many differences between the new iPad and RIM's PlayBook: iPads have 9.7-inch displays compared with the seven-inch PlayBook screen; PlayBooks are able to handle Flash multimedia, whereas iPads are not; there are far more tablet-optimized applications for the iPad, although there is speculation RIM is working on a way to allow its tablet to run apps designed for Google's Android operating system).
It is unlikely RIM made any significant hardware changes following the iPad 2 unveiling early this month, as they would likely take longer to implement. Mr. Abramsky said it is also unlikely RIM made any last-minute pricing changes to compete with the iPad, since RIM co-CEO Jim Balsillie has previously mentioned $500 as the starting PlayBook price point.
RBC expects RIM to sell about four million PlayBook units by the end of this year - an estimate that takes into account the likely launch of cellular-equipped models later in the year. Forecasts for Apple iPad sales this year vary, but are in the range of about 30 million units. Tablet sales in general are expected to jump considerably this year, compared with 2010, so most major tablet manufacturers should see a significant new revenue stream from tablet sales, even if iPads continue to dominate the marketplace.
So far, no high-end tablet manufacturer has been able to significantly undercut Apple on pricing. Mr. Stewart said.
"One area you might have had some debate is: Could RIM have come in 50 or 70 bucks lower [than the iPad 2]" he said.
"But if you see a $1.99 item for sale at $1.98, does it really matter? Forty or 50 bucks is unlikely to change the dynamics of how the tablet market evolves."