Analysis -- BlackBerry PlayBook Sold Out at $199 Apiece: Will Next Batch Start Cheap?
Best Buy announced that all of their Blackberry PlayBook is already "sold out" after cutting down US$300 of its original price as part of their Black Friday bargains. Will this outcome have an effect in the tablet competition happening in the market?
Upon the release of RIM's (Research in Motion) PlayBook, the response for this tablet was not that good as other players in the tablet market gained more positive reviews hence selling more in the market. The Black Friday promotion revealed a whole new direction as Best Buy sold out all Blackberry PlayBook tablet when they sold it for only $US 199.99 (16GB) and $US 299.99 (32GB). Before the price cut-off, there were rumors that Best Buy had plans of dropping the PlayBook tablet due to cancellation of orders and removing it from its website. Best Buy denied these rumors and remarked that they are in fact, doing the opposite. This means that Best Buy plans to increase their PlayBook stock in the "near future".
Amazon's Kindle Fire is also getting the same response as it has sold more units as compared to Apple's iPad last Black Friday. The release of Amazon Kindle Fire was met with positive reviews due to the fact that its performance was better than expected and the retail price (US$199) is a budget-friendly one compared to the dominant player, Apple's iPad 2 which costs around US$499 (16GB, Wi-Fi only). That is a big price difference that consumers nowadays consider when buying any kind of electronic gadget. Aside from the price, Amazon believes that the selling point of Kindle Fire is the wide selection of items ranging from books, TV shows, magazines, apps, games, etc. that users could choose from. Kindle Fire specifications like having a dual-core processor, free Amazon cloud storage, and accelerated mobile browser doesn't hurt as well.
The price cut in Blackberry's PlayBook tablet was a good strategy for both Best Buy and RIM. Mike Vitelli, president for Best Buy commented about this strategy stating that "When a product is less successful, you do what you need to do, and you move to the next thing." PlayBook was the first Blackberry device released in the market without its famous e-mail, calendar, and messenger service. In order to access this, users need to pair with with another Blackberry phone-something that users are not keen to be bothered with. Through this strategy, Blackberry could possibly rebound from two quarters of experiencing "down time" in sales.
Though Blackberry and Amazon are experiencing a positive outlook in the Tablet market, Apple's dominant position remains intact and just feels a "small threat" from this situation. On the other hand, the strategy done by Best Buy and RIM seems to be effective as it had achieved this kind of response from consumers.