RIM Playbook OS 2.0 Still No Game Changer
At the Consumer Electronics Show (CES) held in Las Vegas last week, Research in Motion (NASDAQ:RIMM) previewed the “2.0″ version of the company’s software running its PlayBook tablet and which is scheduled for release next month. [1] The update has some basic features such as e-mail, contacts, and calendar, which were seen missing from the basic PlayBook version released last year. While these are important features, we believe these should have been there when the software was first launched. The tablet market has grown so rapidly over the last year or so, with players like Apple (NASDAQ:AAPL), Samsung and Amazon (NASDAQ:AMZN) taking up the majority of the market, and we think these updates, though good, have come in late and do not add meaningful value to its tablet business.
The PlayBook accounts for less than 1% of our $16.50 price estimate for RIM stock. Our price estimate for RIM stock is largely in-line with the market price.
See our complete analysis of RIM here
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PlayBook Updates Too Little Too Late
We believe the features incorporated by RIM in its PlayBook tablet are too little and too late for it to be a meaningful player in the tablet market. We estimate that RIM sold about 850,000 PlayBook tablets last year, and we expect that to change very little this year as well. On the other hand, we estimate that Apple sold about 39 million iPads last year.
The gap between RIM and competitors is so huge that it is unlikely to be filled by a “minor” PlayBook software update.
The update is still missing some important features such as integration with RIM’s BES (BlackBerry Enterprise Server) and BBM (BlackBerry Messenger). Additionally, RIM lacks the apps ecosystem that has made Apple’s product so popular. We believe unless RIM comes up with something special and caters to these requirements, it is not likely to pose a challenge to the top players of the tablet market.
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Notes:- RIM Previews BlackBerry PlayBook OS 2.0 at CES, Press Release, January 9th, 2012 [↩]