BlackBerry to Match Apple on the Price of Its Tablet
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OTTAWA -- Research In Motion challenged Apple on Tuesday by announcing that its BlackBerry PlayBook would be sold at the same price as the iPad 2.
But the success or failure of the BlackBerry tablet, which will have a base price of $499, is unlikely to be determined in the aisles of Best Buy, Staples, RadioShack or the other retailers that will begin offering it on April 19. Many analysts believe that the PlayBook's main customer base, like that of the original BlackBerry smartphone, will be corporations and government buying in bulk at a discounted price.
"Maybe 'PlayBook' is a misnomer," said Tony Cripps, an analyst with Ovum, a unit of Datamonitor, who is based in London. "R.I.M. would be crazy not to maximize its advantages in the enterprise market."
The PlayBook will be the first tablet that is directly price-competitive with Apple's offering. By comparison, both the Motorola Xoom and the Samsung Galaxy Tab cost more than the iPad 2. Hewlett-Packard, which is also expected to sell its TouchPad tablet to corporations, has not yet announced the price of its device.
While Best Buy began accepting advance orders for the PlayBook on its Web site on Tuesday, the primary buyers of the PlayBook are unlikely to be paying retail. From the first days of the BlackBerry hand-held, R.I.M. carefully cultivated relationships with the information technology departments within corporations and governments. Its products have long included security and control features that are of more interest to people who run computer systems than to the employees using the BlackBerrys.
Jeff Orr, an analyst with ABI Research, said that R.I.M. had been consulting with its large customers about the PlayBook for several months. "They're playing to a market where they definitely have a closer relationship than Apple," Mr. Orr said.
That has produced some initial corporate interest. Sun Life Financial, a large insurance and financial services company in Toronto, has agreed to buy about 1,000 PlayBooks and said that it had already developed an application for the devices.
But beyond the identical prices, R.I.M. and Apple have taken several different approaches to their tablets. The PlayBook, for example, has a 7-inch screen compared to the iPad 2's 9.7-inch display. But unlike the iPad 2, the PlayBook can display Web pages that use Adobe Flash software. and it has a much higher resolution camera for video and still photography.
At first, the PlayBook will be available only in a version that connects to the Internet through Wi-Fi. R.I.M. has said that more advanced, and costly, models for use on wireless carriers' networks will be available from Sprint this summer. Following Apple's lead, R.I.M. said that in addition to the base model with 16 gigabytes of memory, the PlayBook will be offered as a 32-gigabyte version for $599 and a 64-gigabyte model for $699.
Despite the embrace of the iPad by consumers, the demand from businesses and governments for tablets remains, at best, unclear. "It's still very, very early stages," said Mike Abramsky, an equity analyst with RBC Capital Market, a unit of the Royal Bank of Canada, who said that small businesses currently accounted for most nonpersonal use of tablets.
Still, Mr. Abramsky expects that sales to corporations and governments will account for about 30 to 40 percent of all tablet sales by the end of 2012.
Mr. Abramsky said that many corporations would probably prefer the PlayBook because of their history with the BlackBerry smartphone. But at the same time, he said he also expected that companies would find ways to integrate iPads and tablets based on Google's Android operating system, if for no other reason than to accommodate employees who bring their personal devices to work.
First Published March 23, 2011 12:00 am