Retailers Cut Playbook Prices as Kindle Lights Fire for Cheaper Tablets

11.98
Trefis
RIMM: Research In Motion logo
RIMM
Research In Motion

Research in Motion’s (NASDAQ:RIMM) retail partners like Best Buy (NYSE:BBY), Wal-Mart (NYSE:WMT), Staples (NASDAQ:SPLS)¬†and Office Depot (NYSE:ODP) have started to slash PlayBook tablet prices in order to boost sales. [1]¬†Retailers are attracting consumers through $100 coupon and $100 rebate, effectively slashing the price of the 16 GB Wi-fi PlayBook version from $499 to $299. However, given Amazon’s (NASDAQ:AMZN) $199 price tag for the Kindle Fire, this price tag still looks high.

Stiff Competition Among Non-iPad Tablets

A few weeks back, HP discontinued the TouchPad and liquidated inventory with a 16GB version going for $99. The HP sale started a bit of a frenzy among customers. Amazon, launched its tablet earlier today to with a price of around $199. This goes to show that RIM will need to further drop its prices if it wants to compete with HP and Amazon.

Relevant Articles
  1. Ericsson Stock Poised For Take Off?
  2. Should You Buy Keurig Dr Pepper Stock At $36?
  3. Is Johnson Controls Stock Undervalued At $50?
  4. Where Is Capital One Stock Headed?
  5. Is NASDAQ Stock Attractive At The Current Levels?
  6. Mock Meat Stocks Worth A Look Following Kellogg’s Planned Breakup?

Following Amazon’s announcement of Kindle Fire, we wrote a note earlier today suggesting that Microsoft might have trouble cracking the tablet market next year with its Windows 8 platform. See Amazon’s Kindle Fire Could Make Microsoft’s Tablet Entry Even More Difficult

RIM PlayBook Shipments Have Been a Disappointment

During the last quarter, RIM could only ship around 200,000 tablets, which was a major disappointment (see RIM Blows it with Investors Again, Lowering Estimates). During the earnings conference call, RIM’s co-CEO Michael Lazaridis acknowledged this shortfall and hinted towards price cuts in order to boost sales. [2]

He commented:

We have promotional plans in place for the fall intended to drive both enterprise and consumer adoption of PlayBook, including special incentive programs for enterprise, a loyalty program for existing BlackBerry customers and rebates in consumer channels. [2]

See our complete analysis for RIM stock here

Notes:
  1. Retailers begin slashing prices on BlackBerry PlayBook tablet, BGR, September 26th, 2011 []
  2. RIM FY Q2 2012 earnings conference call transcript, SeekingAlpha, September 15th, 2011 [] []