BlackBerry PlayBook tablet poses big challenge for RIM

New OS seen as key to tablet's ultimate success with consumers

BOSTON -- With dozens of new tablets hitting the market in 2011, Research In Motion faces an uphill climb with its upcoming 7-in. PlayBook tablet, which will run RIM's BlackBerry Tablet OS.

RIM showed off the device to a gathering of 50 analysts and reporters here on Thursday. But the general consensus was that Apple's iPad will continue to dominate the market through 2011 -- and that a second-generation iPad expected this spring will keep it on top.

However, some analysts said the PlayBook, which is expected to arrive in the first quarter and will run only over Wi-Fi at first, stands a good chance of closing in on the iPad. Sprint Nextel last week announced at CES that it will offer a WiMax version of the PlayBook this summer. Pricing has not been announced for either version, although RIM has said it will be competitive.

Most tablets on the market cost $450 to $600.

"PlayBook won't be in the top two tablets in 2011, but definitely [in] the top five," said Will Stofega, an IDC analyst who attended the RIM event. "RIM will be second to none on security features with PlayBook."

Stofega has talked to developers who are excited about the device, partly because many of those developers have built business software for BlackBerry handheld devices and they know the value of RIM to enterprise and industrial users.

The big test for RIM, according to analysts, is making the Playbook exciting to consumers as well as to the company's traditional strong base of business users. RIM leads the smartphone market in the U.S. and is No. 2 worldwide, but its percentage share of the market has slipped because of the growth of Android devices and the iPhone.

Some analysts say that RIM has had mixed success with smartphones for consumers and that it has relied too much on its traditional base of business customers. As a result, there's concern about how well the PlayBook can compete in the consumer market.

Asked how RIM will market the tablet and whether it will be able to avoid having the public think of the Playbook as a "tweener" device that fails to fully meet the needs of either businesspeople or consumers, one RIM official acknowledged that bridging both markets won't be easy. "That's the marketing challenge, and that's as much as I can say," said Ryan Bidan, RIM's senior product manager for PlayBook.

Alec Taylor, vice president of software, services and enterprise at RIM, said the company will market the PlayBook by touting commonalities between business and consumer users. "Everybody wants superior performance," Taylor said. "It's a matter of connecting on an emotional basis and remembering the fundamentals. It's going to be an exciting launch."

Stofega said the user interface of the PlayBook and its overall design are exciting enough to generate consumer interest.

"A me-too device won't cut it, especially since a tablet is very different from a laptop and is probably the most intimate of the devices," Stofega said. The operating system, called BlackBerry Tablet OS, is based on QNX Neutrino, a real-time operating system RIM acquired last year.

QNX has advantages for developers because it runs on multiple kernels and takes advantage of a dual-core processor, Stofega said. The PlayBook's processor is the 1GHz Texas Instruments OMAP 4430.

The device was designed with the assistance of TAT Design, which has had input on some Android devices; it should be attractive to consumers and business users alike, Stofega said.

With competition from dozens of rivals, including Apple and its iPad, RIM may face an uphill battle trying to win buyers with its BlackBerry PlayBook.
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