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The BlackBerry PlayBook  (Source: RIM)
RIM spares two less popular models -- the 32 and 64 GB PlayBooks inexplicably

Research in Motion, Ltd. (TSE:RIM) product has been beloved by a small set of fans, but has generally been considered a market dud.  A prelude to RIM's troubles in the smartphone market, the tablet was an expensive sales flop for RIM, despite repeated price cuts and an impressive operating system overhaul.

RIM originally offered 16 GB, 32 GB, and 64 GB models at identical prices to market leader Apple, Inc.'s (AAPL) iPad.  But customers seemed uninterested in a $500 USD entry price for a 7-inch tablet -- especially that 7-inch tablet.  The tablet earned mixed reviews from most major news publications, with many arguing that its downsides made in remarkably inferior to the iPad and Android tablets.

Now RIM has officially axed the 16 GB SKU, writing to Engadget:

RIM will no longer be making the 16 GB model of the BlackBerry PlayBook tablet. The 16 GB PlayBook will continue to be available for distributors and retailers while quantities last. We continue to remain committed to the tablet space and the 32 GB and 64 GB models of the BlackBerry PlayBook continue to be available from our distributors and retailers around the world.

There is more value for our customers in the higher capacity models (32 GB, 64 GB), and as such we have decided to focus our efforts here.

The 32 GB model now sells for $278.59 on Amazon.com, Inc.'s (AMZN) page, a 53 percent mark-down of the original asking price of $599.  The 64 GB model's price was slashed 57 percent from $699 to $299.98.
 
The 64 GB model ranked 39th in Amazon's tablets category, the 32 GB model ranked 46th, and the soon-to-be defunct 16 GB SKU ranked #9.  It's unclear why RIM would kill its most popular PlayBook SKU, rather than simply nailing the coffin shut on the device altogether.  
 
As it continues to wander aimlessly about the market, its tablet future appears murky at best.  Even if the company survives, it may be forced to simply abandon this high margin market for now.


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By Taft12 on 6/8/2012 11:41:01 AM , Rating: 2
First off, thanks for replying Jason!

quote:
The sales figures are pretty straightforward. 9th vs. 39th is a pretty massive gap. You even admit (seemingly) that the cut SKU is by far the most popular. Yet you don't think that's important?


Maybe it's not a massive gap. The tablet market for anything without an apple on the back is pretty small and subject to high variability as a result. The difference from 9th to 39th might only be a few thousand (few hundred?) units. And this is just one retailer. These rankings aren't very scientific and they change every day.

quote:
Also what evidence do you have that the margin is substantially different on the devices?


This one's easy. When you're buying petabytes of NAND at a time, do you think RIM's incremental cost to produce a 16GB vs 32GB is anywhere near the $50 retail price difference? You and I can buy a 16GB USB memory stick for $10-12 including all retail markup! RIM and Amazon are *VERY* happy when a customer buys a 32GB model over a 16GB model.

quote:
RIM could easily have simply forced retailers to bump the price of its 16 GB SKU to raise the margin.


I think you overestimate the clout RIM has with retailers compared to Apple. RIM is effectively doing what you say anyway. They're bumping the price of the cheapest Playbook from $200 to $250 (and the cost to produce the device is nearly unchanged).


"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone














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