Kindle Fire pricing blindsided RIM
By James • Dec 7th, 2011 • Category: Industry News- Photo: davidking / Flickr
Sterne Agee Analyst Shaw Wu says that Research in Motion has been blindsided by the aggressive pricing of the Amazon Kindle Fire tablet. The Fire, which shares much of its hardware and build style with RIM’s Playbook, costs a fraction of what the BlackBerry tablet PC costs, and is selling at a much quicker rate, too.
Response
RIM recently slashed the price of the Playbook by $200 (£130), and then $300 (£195), with Analyst Shaw Wu saying that the move us likely a response to the Kindle Fire, and that it made the Playbook a loss-making device. ‘Our understanding is that RIM was blindsided by Amazon pricing its Kindle Fire aggressively at $199,’ says analyst Shaw Wu [via AllThingsD]. He continued, saying: ‘We estimate that the company is losing $50-$75 per PlayBook sold.’
Wu says even with the massive $485 million write-down RIM has taken with the Playbook, the company will need to pour more money into promoting the BlackBerry tablet PC if they are to sell the units still on hand, thereby increasing the loss made per unit sold.
2007 redux
For Research in Motion, being caught unawares by the launch of a big-deal mobile device is not a first. In 2007, when Apple unveiled the iPhone, the company was adamant that a phone with a screen that large was impossible to make without it being a heavy drain on battery. At the time, we wrote: ‘According to a former RIM employee and a commenter on a Shacknews post, supposedly the Apple smartphone “couldn’t do what [Apple was] demonstrating without an insanely power hungry processor, it must have terrible battery life”.’
The iPhone turned out to be mostly battery with a tiny logic board strapped to it, as confirmed by iFixit’s teardown of the device.
Back against the wall
2011 has been unkind to Research In Motion who has seen sales of BlackBerry smartpones spiral downwards, suffered a major outage of the BIS service and have watched their BlackBerry tablet PC struggle to make an impression on the market. There are doubts about how long the Canadian mobile devices giant can carry on like this for. Maybe 2012 is the year the BlackBerry maker returns to form.
Tags for this article: Amazon Kindle Fire, BlackBerry Playbook, Kindle Fire, rim, tablet pc, tablet PC sales



