In my ongoing battle of putting things into context and making reasonable points in the world of BlackBerry, the issue of the BlackBerry PlayBook consistently being deemed a failure in the media or dud came to my attention. Why would it be a failure? Well, if you compared the sales of the PlayBook to the sales of the iPad, the PlayBook gets smoked. No question. The iPad is an economic beast in the tablet world. Second, RIM’s probably not making much money on the PlayBook at $199-$299. For all I know,at those discounts they could be just breaking even or losing money on each one sold. As a standalone product, it probably is a dud.
This looks like bad news for RIM, and it is. There are many people that are saying that RIM should have focused on their smartphones instead of the PlayBook. They could be right, but what if there’s more to the story? It’s naïve to think that RIM’s sole priority was to make lots of money from the PlayBook. Of course RIM needs to make money as a company, but RIM knows that the smartphone sales make up the majority of their hardware revenue. And they want to ensure they sell their future smartphones, which will all be running the BlackBerry 10 operating system. By releasing the PlayBook beforehand, RIM gave BlackBerry 10 smartphones a head start as a burgeoning ecosystem. In other words, the PlayBook took one for the team.
Apps are hip, cool and pretty much a synonym for being “ahead of the curve”. In the media’s eyes, if there’s an app for something, then it’s pioneering the new technology revolution no matter how good or popular the app is. Despite many apps being less than useful, they do sell devices. And when it comes to selling on the basis of apps, having more apps is an obvious way to do it. Mobile platforms have tried to rectify their app shortage in different ways. You can go the Microsoft way and throw bags of money at developers. Or you can launch a tablet and build the developer tools, subscriber base, and iron out all the kinks before you release a smartphone. Time will tell which method works best.
Imagine if the new BlackBerry 10 phone was released later this year with even 10% of the apps the PlayBook currently has. I’d bet the reviews would unanimously chant “no apps=dead on arrival”. And it would mostly likely be true. It certainly wouldn’t be a success in the media and the ecosystem’s reputation would suffer, leading to fewer developers willing to create apps for BlackBerry 10.
What about other tablets besides the iPad though? I’m sure even most Android tablets sold less than the PlayBook and those manufacturers had all the apps! Of course, some tablets like the Galaxy tab sold more. In that case though, these manufacturers do not have much influence over the software development, and do not gain anything from a premature software release.
From a marketing perspective, it’s also harder to link the potential success of the subsequent BlackBerry 10 phone to the poor sales of the PlayBook because they are two different types of products. The BlackBerry 10 smartphone still has a chance at generating some significant momentum without being dismissed as another failure. The new smartphone can be marketed as something completely new, free from much of the baggage the tech media might throw at it.
I would say the decision to create a QNX-based tablet before a smartphone has other advantages. I would guess that most people would download more apps and games on their tablet then their smartphone. Why? Well, a larger screen does make many games much more enjoyable to play, possibly creating a higher demand for tablet games over smartphone games. This means more developers would be interesting in creating a tablet game over a smartphone game. Most tablets also don’t have a cellular connection, leaving them unable to text, email and call on the go natively. This means that tablets are less useful without the necessary apps to support them. Also, if you look at any poll, I’m sure you’ll see that the most common uses for smartphones are still typically texting, email and calling. Tablets are more app-centric than smartphones. Despite being a small fraction of the smartphone market, the tablet market may be poised to grow faster. If you believe these hand-waving arguments, then you can see why making a tablet to kick-start third-party app development on the ecosystem might be a good strategy.
This is sort of a joke in the BlackBerry community (and it’s mostly true), but with the half a million or more PlayBook tablets in consumers hands, RIM now has a sizeable group of unknowing beta testers of the new BlackBerry 10 operating system’s foundations. The stability, spellcheck, notifications, battery life optimization, email, hardware-accelerated graphics and security of the BlackBerry 10 operating system were all developed and improved using the PlayBook’s release. RIM now has the basics taken care of for BlackBerry 10 and is now better able to not only provide a new product of decent quality, but also one with a more predictable launch date.
Of course, by mid-2011, RIM realized the PlayBook was not selling as well as it had hoped. I believe RIM decided to shift their strategy and heavily discount the PlayBook to sacrifice the short term sales for future subscriber base and market share potential. RIM has further pushed this strategy by creating a special prototype device for developers at BlackBerry Jam in May.
Instead of hitting the market quickly and prematurely, RIM has decided to be patient and execute decisively. RIM is now taking some short-term pain for long-term gain. Whether it pays off is another story. I believe that RIM made big mistakes earlier on with the media’s perception of the PlayBook, but not necessarily with its quality. The customer reviews of the device are generally positive despite the largely negative initial reviews.
I’m saying the PlayBook shouldn’t be all about dethroning the iPad, even though RIM probably thought it was initially. RIM then saw the writing on the wall. The PlayBook may have been a financial failure for the company, but it is still entirely possible that it lays the groundwork for a success in software innovation and sales for the future BlackBerry 10 phones. RIM is willing to lose the battle in order to have a chance to win the war. To me, it’s a refreshing and clear break from RIM’s historically conservative strategies. If the BlackBerry 10 platform fails to catch on, then the BlackBerry PlayBook can truly be deemed a failure.
Unfortunately for RIM, BlackBerry 10 will be at the expense of a few hundred million dollars and the poor PlayBook sales. But we all know the transition to a new platform is tough, and I’m even guessing that BlackBerry 10 phone won’t sell that much. But the important part is that they continue to mature and develop the platform, and grow year-after-year sales much like the iPhone had to do. The sacrifice the PlayBook has made towards increasing RIM’s chances of a future in the smartphone industry might pay off, and that could be just what RIM needs to tip the scale.
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