Even the BlackBerry CEO concedes it's a tough business, and doesn't
sound confident about another tablet anytime soon. A BB10 update is
coming to the PlayBook though.
Speaking to the press yesterday during the BlackBerry 10 launch event, CEO Thorsten Heins wasn't particularly upbeat about
tablets.
"The tablet business is rather difficult," he conceded.
Indeed, the tablet market has seen a lot of entrants, but only a few winners. While Apple's iPad franchise continues to dominate, its market share is eroding to only a few players, including Google's Nexus 7, Amazon's Kindle Fire
franchise, and a few of the Samsung Electronics tablets. But that
doesn't leave a lot of room for a company like BlackBerry (formerly
Research in Motion), which is struggling to claw its way back into the
smartphone business.
"Personally, I think it's pretty futile at this point," said Jan
Dawson, an analyst at Ovum. "Like Apple, (BlackBerry) really has to
make its margin on the device, but it can't charge a premium like
Apple."
Heins said as much when he said that he was only interested in
pursuing areas that were profitable, indicating he doesn't see much
money to be made in the tablet business right now.
BlackBerry, of course, had been burned pretty badly with its first tablet in April 2011. The PlayBook
was a favorite project for then co-CEO Mike Lazaridis that ended up as
a major embarrassment for the company when it launched. It was the
first device to use the QNX operating system, which is what BlackBerry
10 is based upon, but lacked critical features such as BlackBerry
Messenger and e-mail.
BlackBerry steadily updated the software for the PlayBook,
filling in missing features, and heavily discounted the product,
resulting in an increasing trickle of sales. The company shipped
255,000 PlayBooks in the fiscal third quarter, a paltry number by
normal standards, but impressive given that the product is nearly two
years old.
Heins said BlackBerry was working on a BlackBerry 10 update for the
PlayBook, although he didn't specify when it would come out.
He also opened the door to BlackBerry potentially building tablets to
address specific industries, but from the looks of it, those plans are
just that. He talked about the potential to sell additional services to
that industry.
"We want to provide a value proposition that isn't just hardware, but software too," he said.
But it's unclear whether businesses would even want to use a BlackBerry tablet, especially with tablets running
Windows 8
starting to come in to the market. Despite a large presence in the
business world, the company doesn't have experience catering its
products for individual industries, also known as verticals.
"(BlackBerry) has no real credibility as a vertical provider,"
Dawson said. "It's never done anything vertical specific before and
most industries can see through superficial verticalization pretty
easily."
Heins is taking a look at this area because the consumer market
for tablets looks even more frightening to a company in BlackBerry's
position.
While Apple's core iPad continues to flourish under the $500 price
point, few other tablets have seen that kind of success. The Kindle
Fire made its mark with its lower price point, and the
Nexus 7
likewise hit the $200 mark. The pressure from the lower-priced tablets
forced Apple to offer the lower priced iPad Mini, which yields less
profitability, something investors have knocked the company for.
In this environment, BlackBerry would be hard pressed to make a quality
product that retails at such a low price and make money off it.
"So it's stuck between pricing at cost like Amazon and Google and
effectively losing money, or charging a higher rate and therefore not
selling many," Dawson said.
So if you're a hardcore BlackBerry fan looking for a tablet, the PlayBook may be your best -- and only -- bet.
