Thursday, November 11, 2010

Rim plays hardball with tablet pricing

RIM's tablet to cost under $500

Research In Motion (RIM) Co-Chief Executive Jim Balsillie laughs as he holds a PlayBook tablet computer during an interview at the G20 CEO Summit in Seoul on Wednesday. BlackBerry maker RIM expects sales of the smartphones to grow by two-thirds in two years if it continues to perform "moderately." (Nov. 10, 2010)

Research In Motion (RIM) Co-CEO Jim Balsillie holds a PlayBook tablet computer during an interview at the G20 CEO Summit in Seoul, South Korea (Nov. 11, 2011)

ALY SONG/REUTERS

RIM co-founder Jim Balsillie jumped back into the ring yesterday to take a few more shots at rival Apple Inc. and dismiss concerns that the BlackBerry is losing ground to the iPhone.

“The fact that the CEOs of the two top performing companies in the Smartphone and tablet space are sparring so aggressively and personally really illustrates just how much is at stake here,” said independent technology analyst and writer Carmi Levy.

RIM also confirmed its Playbook tablet computer will retail for less than $500 when it debuts in North America in the first quarter of 2011.

“The product will be very competitively priced,” co-chief executive officer Jim Balsillie said in an interview with the Wall Street Journal in Seoul Wednesday.

He declined to be more specific, but the company later confirmed it will sell for less than $500. Apple’s iPad starts at $499.

“Pricing is probably the most important decision that any company can make as it positions its tablet against the iPad,” Levy said. “It’s virtual death to price a tablet at or above the iPad. It’s the device that defines the market right now.”

As well, RIM may sell the Playbook through retail chains Target Corp. and Best Buy Co. in the U.S. as well as through carriers, Balsillie said.

“RIM sees an advantage here in that while Apple is going slow on broadening beyond the Apple store, it can be more aggressive on that front and thus have more shelf space in more places,” Levy said.

RIM shares gained $3.15, or 5.68 per cent on the news, to close at $58.61 on the Toronto Stock Exchange on Wednesday. That’s its highest level since mid-August.

The shares rose $3.44, or 6.3 per cent, to $58.44 on the Nasdaq Stock Market. That was its highest level since June 24 and biggest one-day gain in four months.

RIM has lost 13 per cent this year as Apple has added 51 per cent.

Balsillie dismissed concerns when asked whether the Waterloo-based firm may be losing corporate customers as they look to switch to other smartphones—notably Apple’s iPhone and other phones powered by Google Inc.’s Android software.

“No [we are not losing corporate customers]. There’s always competition and evaluation for enterprises, [but] we still have a super strong base and it’s still growing...it’s going to grow faster with this tablet,” Balsillie told the Journal.

He also said that he expects Research in Motion’s global market share in mobile operating systems to surpass Apple’s in the coming quarters. “We just finished our third quarter now...we will be pass them [Apple] and we will stay past them,” he vowed.

RIM unveiled its Playbook in September, eagerly touting its ability to support Adobe’s widely used Flash multimedia software, something Apple’s iPad does not do.

Last month, Apple CEO Steve Jobs said a batch of seven-inch-screen tablets, including the PlayBook, would be “dead on arrival” because they are too small to compete with the iPad, which has a 10-inch screen. RIM insists the more compact tablets would be a big portion of the market.

In response, Balsillie said at the time customers are getting “tired” of Apple’s controlling business strategy.

RIM, Hewlett-Packard, Samsung Electronics and Motorola are seeking to build tablet computers that will grab the market between smartphones and laptops.

Apple sold 3 million iPads in the first 80 days after the device’s April debut, eclipsing sales of its iPod music player.

The iPad’s dominance in the tablet-computer market will “change when we’re in the market,” Balsillie said.

South Korea will be one of the first countries outside the United States where the PlayBook will be sold, Balsillie said, declining to say in how many countries the product will go on sale in during the global launch phase, expected in the second quarter.

“Korea’s such a strategic market, because it’s so big, so innovative,” Balsillie said. “It’s going to be one of the very, very first.”

With files from the Star’s wire services

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