Op-Ed: Whither the BlackBerry PlayBook? Not yet

Posted Sep 22, 2011 by Bradley Axmith
Research in Motion’s foray into the tablet market with its PlayBook tablet earlier this year appears to have jeopardized the company's survival. But if the fat lady is singing RIM’s defeat, it’s on a music file that cannot be played outside of iTune
The BlackBerry PlayBook tablet
The BlackBerry PlayBook tablet
Research in Motion
After stumbling through two disappointing quarters, the survival of Research in Motion has been questioned for the first time in its history as its stock continues to tumble below 59 percent of its value from last year.
The Waterloo, Ontario firm’s earnings fell short of earlier forecasts, with revenue down 10% from the previous quarter to $4.17 billion and 47% thinner in profits. Disappointing sales of the PlayBook running the QNX platform have led analysts to suggest RIM will have to abandon the tablet market in order to refocus on its BlackBerry line of smart phones and stave off its continued stock devaluation. Rim suffered a 11% stock drop after announcing its earnings.
News that RIM is slowing down production of its tablets has led some to suggest the PlayBook will follow HP’s TouchPad, which failed so thoroughly to compete with market leader Apple that it announced its eventual discontinuation.
While Apple shipped 13.6 million iPads in the 2nd quarter, RIM has only shipped 700,000 units to its retail partners. Further disheartening news is the revelation that RIM received 1.5 million units from its supplier, Quanta of Taiwan, meaning 800,000 are gathering dust somewhere in storage.
The fate of the BlackBerry PlayBook resonates robustly across the burgeoning market for mobile devices because it represents a giant and dynamic company seeking to challenge a consumer niche essentially created by the iPad.
According to IDC, Apple enjoyed 68.3% of the tablet pie in the 2nd quarter with the closest competitor not actually a single manufacturer but a mélange of players running the Google Android operating system comprising 26.8% market share.
Tablet shipments worldwide will rise five-fold by 2016, comprising 253 million, according to Juniper Research. If even remotely accurate it shows tremendous growth potential for companies seeking to appeal to the 200 million buyers in the next five years.
Enticing 3rd party software developers to design great products for a particular operating system is key to succeeding in this fertile ground, Paul Kedrosky of Bloomberg claims. For example, he calls the migration of app developers to Apple’s iOS and Android away from RIM’s QNX ‘the kiss of death’ for a company struggling to compete.
Technology analyst, Anil Doradla likened BlackBerry’s software woes with that of Nokia, who abandoned its smart phone OS, Simbian after it bled market share away to Android products and iPhones.
Doradla described the PlayBook as a strategic miscalculation that will force the company to reassess its commitment to its software. The tablet’s lack of connectivity without a BlackBerry phone was a major source of contempt by consumers and the cause for delay by some carriers.
RIM addressed the harsh criticism of its PlayBook announcing version 2.0 of its QNX OS, in response to the major complaints expressed by both consumers and carriers alike. V2.0 will contain updates that provide for native email, calendar and contacts without a bridge to a BlackBerry device. An Android App Player and BlackBerry Video Store will integrate audio/visual content to complement the HDMI outlet and grant access to the Android Marketplace.
QNX is the future platform for all BlackBerry devices, and CEOs Mike Lazaridis and Jim Balsilille have said that v2.0 together with price cuts will be a game-changer.
The 3rd quarter will prove very interesting as a host of new tablet PCs enter the arena including Lenovo’s IdeaPad and ThinkPad. The latter will appeal to corporate consumers, who will make up 20% of future growth according to Juniper, while the former will offer the cheapest 7-inch tablet so far.
Add to that a serious contender from Huawei’s MediaPad, the first 7-inch tablet to run Android 3.2 Honeycomb, Motorola’s high-end Xoom and the continued presence of lesser known, but cheaper alternatives from Asustek and Acer, it could be the platform and the ability to offer multi-device plans that distinguish products from the pack.
Microsoft appears to have bought into this thinking, evidenced by opening up to 3rd party developers and their commitment to mobility. A preview for Windows 8, available next year, will offer a full operating system capable of seamlessly running the full range of Office programmes on tablet PCs.
It would appear too early to sound the death knell of the PlayBook or of RIM as communication trends are proving fluid with the advent of tablet PCs and the growth of WiFi infrastructure. The field of new serious competitors is also finally opening up, meaning claims that Apple has triumphed may, too, prove premature.