One of the things that will really make or break the BlackBerry PlayBook launch is pricing. It is not totally dependant on pricing but the big elephant in the room is the $499 price tag for the entry level iPad with an iPad 2 around the corner. This led me to speculate what kind of retail strategy RIM has for the BlackBerry PlayBook and trying to read into RIM’s market research surveys. My gut feeling currently based on what I have been hearing is that RIM will make the 16GB Wi-Fi version of the PlayBook somewhere between $449-499 starting point with the 4G models being discounted by carriers to somewhere between $199-299. Who knows if that will actually pan out.
RedNightHawk pointed out to me that Jason Hiner of TechRepublic has also been looking into why current iPad competitors cannot compete on price. Apple has a huge leg up on the competition by having their own 300 retail stores around the world. These stores get a majority of their device stock including the iPad. This allows Apple to keep more than 50% of the sale price of each iPad since the parts cost $229.35. From what Jason explains normal retail sales leave the retailer with a 50% markup on the wholesale cost. That means if RIM sold the PlayBook to carriers and retailers for $250 the retailers would sell it for $500. That means to hit a lower $449 price point they would have to be able to sell the PlayBook for $225.
I am curious to see how RIM plans on executing their strategy. They really need a win on the PlayBook and I would almost go so far to say they should artificially lower the price on the 16GB PlayBook since it HAS to be lower than the $499 iPad entry cost. RIM can compete with similar features to the iPad but to unseat the iPad it needs to either offer a whole new experience or be priced much lower with the same features or better. Keir Thomas is asking the same question over at PC World wondering if tablets are just too expensive for their own good. Its an interesting argument and yet another reason why RIM can really shake things up by offering a professional tablet at sub $500.
What do you think?