RIM to Sell Tablet for Less Than $500 to Take on IPad – BusinessWeek

Posted: November 10, 2010 in Uncategorized

RIM to Sell Tablet for Less Than $500 to Take on IPad

November 10, 2010, 12:35 AM EST

By Jun Yang

(Updates with official’s comments from sixth paragraph.)

Nov. 10 (Bloomberg) — Research In Motion Ltd., the maker of the BlackBerry smartphone, said it will begin selling a tablet computer in North America in the first quarter for “under” $500 as it takes on Apple Inc.’s iPad.

“The product will be very competitively priced,” Co-Chief Executive Officer Jim Balsillie said in an interview in Seoul today, declining to be more specific. Sales of the BlackBerry Playbook, unveiled in September, will expand globally from the second quarter, he said. The iPad starts at $499.

RIM, Hewlett-Packard Co., Samsung Electronics Co. and Motorola Inc. are seeking to build tablet computers after the introduction of the iPad triggered demand for devices that can fill the gap 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.

Waterloo, Ontario-based RIM is trying to differentiate itself from Apple and other tablet makers by stressing the ability of its PlayBook tablet to handle Adobe Systems Inc.’s Flash technology that underpins much of the video content on the Internet. The iPad doesn’t run Flash video or animation.

Apple, based in Cupertino, California, increased its market share in tablet computers to 95 percent in the third quarter, according to Strategy Analytics. Global tablet sales rose 26 percent from the previous period to 4.4 million units, with Apple selling 4.19 million iPads, the researcher said last week.

IPad’s Dominance

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

Apple Chief Executive Officer Steve Jobs has said RIM would struggle to attract application developers to support its BlackBerry smartphone and that devices like the PlayBook are “dead on arrival” because they are too small to compete with the iPad.

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

The PlayBook has a 7-inch (18-centimeter) screen, smaller than the iPad’s 9.7-inch display.

The company is counting on the tablet to increase revenue as the BlackBerry loses ground. RIM’s share of the smartphone market slid to 18 percent in the second quarter from 19 percent a year earlier. Apple’s iPhone boosted its share to 14 percent from 13 percent, and devices based on Google Inc.’s Android software surged to 17 percent from 1.8 percent, according to researcher IDC.

South Korea Sales

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

“Looking at both channels is the likely target,” he said.

South Korea will be one of the first countries outside the U.S. where the PlayBook will be sold, Balsillie said, declining to say in how many countries the product will go on sale 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.”

RIM is hiring staff for sales and service after registering a legal entity in September to set up a branch in the country, he said. The office, to be located in downtown Seoul, will start operating by the end of this year.

RIM will start selling the Torch, the company’s first smartphone to combine a touch screen with a full Qwerty keyboard, in Korea this year or early next year, he said.

A 50 percent price cut by AT&T Inc., the second-largest U.S. mobile-phone carrier, is “hugely good” for the sales of the device, Balsillie said. AT&T said yesterday it dropped the price for the Torch to $99.99 with a two-year contract from the $199.99 it charged when it began selling on Aug. 12.

“That’s a dream come true,” he said. “New pricing, new promo, right into the holiday season — what can I say? I couldn’t be happier.”

–Editors: Anand Krishnamoorthy, Young-Sam Cho

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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