RIM is drastically cutting the price of its PlayBook tablet in the US, but it won't save the device - the PlayBook suffers from inherent design flaws.
RIM only managed to sell 200,000 PlayBooks in its latest quarter, down from the 500,000 it flogged in the three months since launch, reports the Wall Street Journal. The problem is, when buying a PlayBook the customer is also committed into buying a Blackberry phone if they want the full experience. And not just added extras - simple features like using email require tethering.
Retailers in the US like Best Buy and Wal-Mart are offering the tablet at a bargain bin cost of $200, compared to the rather steep original $500. What effect that will have on RIM's profits remains to be seen - it's not talking about the cuts, but analysts believe selling the device for $200 means operating at a loss.
RIM products are becoming less popular in its traditional corporate market userbase anyway, says Andrew Jacques, general manager for EMEA at Good Technology.
Good Technology is a company which runs security for large enterprises at an app level - meaning workers can use their own devices. "The two advantages for Blackbery were great email and excellent security," Jacques says. "I think Good replaces those. We enable other devices to work in those large organisations."
For example, people are bringing their iPhones to work in enterprises that deal with sensitive data. "Whether the CIO likes it, the users are going to demand support for an iPhone or an iPad," Jacques says. "And if they enable that, the CIO gets a certain amount of wins. They get more productivity and employee satisfaction, and it's cheaper for them to use their own iPhone than giving them a company-owned Blackberry."
It hasn't been a good couple of years for RIM. The encryption drama in countries like India did little for its name in the press, as Lazaridis stormed out of a BBC interview claiming there wasn't a problem. More recently, much of the Blackberry services suffered from an outage, worldwide.
According to Good, the world is moving forward from email and RIM is struggling to keep up. "An interesting point is that when it comes to smartphone usage, people only use email seven percent of the time, and their phone functions ten percent of the time," Jacques tells us. "The other time they're using apps, and RIM doesn't play in that space. Their developer relations are poor, people are shifting away and moving towards smartphones.
"RIM's attempt at the tablet has been a disaster."
Blackberry's press office wouldn't tell us if price cuts were in the pipeline for the EMEA region, but that it will forward a statement when it makes one. Which sounds to us like there will be prices in EMEA for the PlayBook too.