Research in Motion (NASDAQ:RIMM) recently introduced key new features for its PlayBook tablet. The new features include a video chat application, [1] and a Facebook application. [2] The PlayBook was launched on April 19th, but got off to a shaky start, as early indications of sales figures were muted (see Early PlayBook Struggles Don’t Shake RIMM Stock Value). Can these features spark a surge in PlayBook sales and help RIM challenge Apple’s (NASDAQ:AAPL) iPad, and Google (NASDAQ:GOOG) Android-based tablets like Motorola Mobility’s (NYSE:MMI) Xoom and Samsung’s Galaxy Tab?
We currently forecast that RIM will sell 4 million PlayBook units in 2011, and will grow sales a little over 2% annually towards 12.5 million by the end of our forecast period. PlayBook accounts for around 7% of our $68 estimate for RIM stock. Our price estimate stands roughly 40% ahead of market price.
Our Take
The video chat feature is already present in Apple’s iPad 2 (named FaceTime), and hence this is more of a catch-up feature for RIM. The Facebook app is an attempt to provide users with a more complete social network experience – according to RIM, there are already over 30 million users of its Facebook app for BlackBerry smartphones. [2] Although both of these features are aimed at keeping RIM competitive in the tablet market, it remains to be seen whether they will actually have any meaningful impact on PlayBook sales.
See our full analysis and $68 price estimate for RIMM
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