RIM Plans To Take on iPad with a Price Below $500

As its mobile devices lose ground, Research In Motion's decision to sell its jumbo BlackBerry, the PlayBook tablet, for less than $500 could help the company gain some traction. The Wi-Fi-equipped PlayBook has a seven-inch touchscreen and front and back cameras for video conferencing, unlike Apple's popular but camera-less 9.1-inch iPad.

The PlayBook will launch in North America in the first quarter next year and globally in the second quarter.

At the Group of 20 Business Summit in Seoul, Korea, this week, RIM co-CEO Jim Balsillie told news organizations that the device will sell for less than $500. The iPad's basic 16GB model with Wi-Fi sells for $499.

"A price under $500 enables a media tablet to reach a broader audience," said ABI Research analyst Jeff Orr.

Fits A Niche

The PlayBook is thin and light for traveling business users, has security options through the BlackBerry Enterprise Server, and supports Adobe Flash for video content, which is banned on Apple's mobile devices. That combination of features might make it a formidable iPad rival compared to other tablets like Samsung's Galaxy Tab, which went on sale this week.

"Professionals and business users are showing interest in a touchscreen companion computing device that allows easy interaction with frequently used applications for both home and work lifestyles," Orr said. "RIM's approach with PlayBook is to provide a Wi-Fi-enabled device initially that also synchronizes with BlackBerry smartphones."

But Orr said adoption of the devices in the workplace could pose a challenge to IT teams that will have to integrate them with current services, applications and security systems.

"Supporting any and every consumer device in the enterprise is cost-prohibitive," he said. "RIM's attempt to extend its IT-friendly BlackBerry solution to media tablets could give it a leg up on media-tablet vendors squarely focused on infotainment and delivering an excellent consumer experience in and around the home."

Sweet Spot

Devices powered by RIM's BlackBerry OS made up 14.8 percent of the market in the third quarter compared to the 16.7 percent share running Apple's iOS, according to Gartner Research.

The PlayBook will be powered by an operating system made by Canada-based QNX Software Systems, a RIM subsidiary. Most other recent tablet devices, including the Galaxy Tab, Toshiba's Folio100, and the Archos 7, are powered by Google's Android.

Verizon Wireless and T-Mobile will sell the Galaxy Tab for $599, though T-Mobile will offer it for $399 with a two-year data plan.

"Keep in mind that the 'sweet spot' for consumer electronics in the U.S. is still $200," Orr said. "Products priced below that threshold are more likely to be purchased on an impulse, while those priced above the mark require more budgeting and consideration before the purchase."