Originally Posted by macinthe408
They must already be losing money on each of these things. If they weren't, they'd undercut the price of the iPad.
Now, instead of touting the fact that it's cheaper than the iPad, "the same price as" won't have as much of an impact as they'd hope for.
There are so many factors working against PlayBook making any money at all for RIM, but I'll only bring up three. And I'm not even going to use the words "infrastructure" or "mindshare."
First, Apple gets the best component prices due to their high purchase volume. This is because Apple uses many similar or identical components across the iPhone, iPod touch, iPad, and Apple TV lines. Thus Apple has the best margins and therefore the best profits.
Some people say that the iPod touch is just an iPhone without the phone. I say it's a profitable way for Apple to further lower their component costs. iPod touch sales roughly equal that of iPhone, Apple benefits from economy of scale. You do the math.
Second, as Steve Jobs said, 7" tablets are tweeners. Too big to fit in a pocket, too small to allow comfortable typing, too big to use as a phone, too small to impress anyone when put next to an iPad 2. It doesn't matter what hot-rod (and I mean literally hot) CPU RIM solders onto the motherboard. 7" is a bad size.
Third, RIM will no doubt fall into the "market share above all else" trap. They will look for any way to inflate the number of units shipped, especially to high-profile clients. And that means giving PlayBooks away to said high-profile clients in large numbers.
RIM would be happy to pay for employee training and other costs incurred by their clients during the trial period. Many computer companies do this, just for bragging rights. All of which cut into any profits RIM would have made.
And don't forget that Dell is also trying to sucker corporate IT into using their Business Tablet. Appropriately running Windows 7, which is completely inappropriate for use on a pad. RIM will be competing against Dell in the "professional" market. And we all know that "professional" is a euphemism for "forced to use what the IT department tells employees to use."
Balsillie is completely giving up on the consumer market. RIM, like Microsoft, will end up milking the corporate market for all it's worth. And they'll use up any goodwill they had left in the process.