Dirt Cheap PlayBook May Mean A Tablet Price War Is Coming

The beginning of 2011 forewarned of the 80+ Tablet entrants debuted at CES, we were on the edge of our seats, we were cautioning clients to wait and see how the mobile and tablet landscape would play out regarding Apple iPhone and Android Smartphone and, moreso, iPad tablet dominance and the planned sneak attacks in store from HP and Blackberry, and even Microsoft Windows.

Well, all contenders have fallen (hard) thru this summer, with HP slashing prices to $100 and downright dropping out of the Tablet and Mobile OS race altogether (anybody want to buy a discount mobile OS?). Microsoft folded (within weeks) on the vaunted Kin phone and the Windows 8 Mobile ain’t really boosting metrics as they prepare a seamless Windows 8 that follows the design cues of mobile OS (Yoinks!). And now Forbes notes that Blackberry is officially not a viable contender as they contemplate price slashing on 200,000 units shipped last quarter.

But the Forbes article points to a bigger takeaway:

BlackBerry can’t afford to exit the tablet business — as rival Hewlett-Packard did — because the QNX operating system running the PlayBook is the company’s future.

BlackBerry will be shifting all its handsets over to the new software next year, so pulling the plug on the only mobile device to use the software now would be suicide.

So what now? Maybe a fire sale. Canadian cable company Rogers is selling the PlayBook, which normally starts at about $511, Canadian, to employees for $249 and up, according to Boy Genius Report. That hints price cuts for the rest of us are coming.

The result could be ugly for RIM’s profit margins. HP’s TouchPad sparked a buying frenzy at the unsustainable price of $99 because HP couldn’t afford to stay in the tablet market; RIM’s BlackBerry may have to find a price that generates similar enthusiasm because RIM can’t afford to exit the tablet market.

So who can afford to make the least amount of money for the longest here? Maybe Amazon. Analysts are guessing its forthcoming tablet will cost $250, a price that probably can’t be matched without accepting single-digit margins.

That’s an interesting challenge for a company like, say, Apple (which, granted, has done well when faced with interesting challenges). If you’re an online retailer with a profit margin of 2.38%, like Amazon, however, single-digit margins don’t look like a challenge at all, they look like an opportunity.

*Though, it occurs to me that Samsung is still a viable contender in Tablet with its Galaxy Tab. Right?….But then as I browse for latest sales figures…20,000 units. Plus Apple’s lawsuit injunctions are limiting Samsung Galaxy Tab sales in Europe.

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