[jnko]

I still don't understand what they are doing selling this thing at the same price point as the iPad 2 and other 10" tablets. I have a 64gb one and I absolutely love it compared to my old iPad but the average person is going to go $499 for a BB device I've never heard of or $499 for an iPad 2 that everyone and their brother has and make their decision pretty easily. Since RIM was so late to the game with this thing I have no idea why they didn't start it at $399 and go from there. Even if it was just for a short period, like 6 months or something. I'd have gotten it the day it came out, it took me a while to swallow the price vs. buying an iPad2 and I can imagine the average consumer feels the same way.

[hackerguy]

Since RIM was so late to the game with this thing I have no idea why they didn't start it at $399 and go from there. Even if it was just for a short period, like 6 months or something.

As a marketing strategy, that simply would not work.

[dandbj13]

I still don't understand what they are doing selling this thing at the same price point as the iPad 2 and other 10" tablets.

For the most part, they're not.

Worse yet, they are going to have to either lower the price once they release the 10" version, thus admitting a 7" tablet should be less expensive than a 10", price the 10" the same as the 7" and watch the 7" die a bad death, or price the 10" even higher than the iPad. There is a bad death for this product around every corner. Either they should have never introduced a 7" first, or they should never release a 10".

[FF22]

Can't afford to sell for a loss if it costs a certain amount to manufacture. On the phones, they can make additional income, I presume, by the data service you need to purchase. Besides, smaller sometimes costs more money. Better screen might be a factor, too.

[sam_b77]

I still don't understand what they are doing selling this thing at the same price point as the iPad 2 and other 10" tablets. I have a 64gb one and I absolutely love it compared to my old iPad but the average person is going to go $499 for a BB device I've never heard of or $499 for an iPad 2 that everyone and their brother has and make their decision pretty easily. Since RIM was so late to the game with this thing I have no idea why they didn't start it at $399 and go from there. Even if it was just for a short period, like 6 months or something. I'd have gotten it the day it came out, it took me a while to swallow the price vs. buying an iPad2 and I can imagine the average consumer feels the same way.

You only mentioned the screen size as a reason for a lower price point.
You failed to mention that as far as computing power goes it has the same has the ipad 2 (Dual core 1 ghz, 1gb Memory)
Yes screen is 7", but here is the additional hardware that you get:
1) Stereo Speaker with Stereo Sound
2) 5 MP camera at the back and 3.2 MP camera in the front. ipad 2 doesn't have this spec cameras
3) USB port : Connects to your laptop like a Flash Drive
4) Standard Native Micro HDMi Port.
All of the above costs money as well.
And dare I say, a rock solid multitasking OS optimized for a tablet and not a mobile phone OS ported to a 10" screen.
The price point is just fine and keeping in line with the market.

[Megacharge]

Can't afford to sell for a loss if it costs a certain amount to manufacture. On the phones, they can make additional income, I presume, by the data service you need to purchase. Besides, smaller sometimes costs more money. Better screen might be a factor, too.

I remember reading somewhere that it costs RIM 205$ CDN or USD to make a 16GB Playbook. If that really is the case, I think they are being greedy with the pricing scheme of the Playbook.

[kbz1960]

I remember reading somewhere that it costs RIM 205$ CDN or USD to make a 16GB Playbook. If that really is the case, I think they are being greedy with the pricing scheme of the Playbook.

Have you looked up what it cost apple to produce the ipad?

[howarmat]

its 205 for the playbook 32gb, 18x for the 16 gb i think

ipda 2 32gb is about 325

[shlammed]

the margins on the playbook are slim to none

anything less than $499 and RIM would probably make $0 off each sold.

[shlammed]

I remember reading somewhere that it costs RIM 205$ CDN or USD to make a 16GB Playbook. If that really is the case, I think they are being greedy with the pricing scheme of the Playbook.

You do realize that retailers take a % of sales right?

You also need to factor in how much it cost for R&D, marketing, etc.

You can't just base it on the cost of materials to assemble one.

[howarmat]

i wanna say retailers get around 30%

[Economist101]

Retail mark-up on electronics is normally in the 5-10% range for big name manufacturers. Avoidance of this markup is one of the benefits of having your own retail and/or online stores.

[ky77]

Honestly after being a prior owner of a PB I feel that the price point to take over the tablet world should have been starting at 249 for a 16g. I believe the volume that rim could have sold would have offset any production loss they might have recieved initually until production costs dropped as they do with all electronics. Problem I see for Rim is with price being equal to most of the tablets on market is that it doesnt really do anything betterthan the other tablets out there. You need something to influence new fans to take a shot with the device and in this day and age price might have been thier biggest thing to try to use.

[omgitsalive]

lol... try Euro prices for a change and you'll be cured of your money issues.

579 euros for 32gb (incl 19% tax)
This american 32gb I'm typing on cost me 463 euros (incl 6% tax). IMO this is a fair price / quality.

[Sonic77]

Take a look at your local used market, not sure why but here the number listed for sale has greatly increased in the last few weeks.

Accordingly the value of a Playbook has dropped, I've seen 64Gb models listed and not selling for under $500!

[berklon]

The market will decide it's price.

Right now the price is set by RIM, and if they aren't selling enough of them - they'll have no choice but to drop the price.

[ky77]

I know different markets but take the video game industry. When the consoles of today launched the Wii killed Playstation and xbox sales not cause of better games or hardware but it launched at 199 and the other systems were 400 plus. The lead Nintendo gained was never caught by the other systems and today both of those systems sell close to the 199 starting price nintendo had anyway. In the tablet world soon as any company gets this it will put them in the drivers seat

[snowfree52]

lol... try Euro prices for a change and you'll be cured of your money issues.

579 euros for 32gb (incl 19% tax)
This american 32gb I'm typing on cost me 463 euros (incl 6% tax). IMO this is a fair price / quality.

in France : 599� for a 32Gb

Just bought my 64 Gb for 699� (or 849 USD ...)

[joshua_sx1]

a street fish vendor once I asked of why he is selling his fishes almost the same price as those in the supermarkets... he simply replied "they are selling, why not?"...

[kevinnugent]

Of course, this now begs the question what the pricing on the 10" model will be. It can't be more expensive than the iPad. This pretty much devalues the 7" model. Unless some marketing wunder-kid tries to sell the "less is more expensive" routine.

[brucep1]

I completely agree. $399 would have been a much better price point...you need to get this product in the hands of consumers or else no one is going to develop for it.

Developers aren't going to work for a tablet that will sell 2 million units when it can develop for honeycomb or ios for a lot more consumers. The xoom sucks, but guess what, there are so many honeycomb tablets that it is gonna get pulled along for the developer ride.

Guess what? you take a hit on the product, and make money on the applications. Take a note from the video game industry.

Looking at margins isn't really fair since all the R and D money was spent already. What good does the PlayBook do sitting on shelves with a $500 price tag?

[Economist101]

Guess what? you take a hit on the product, and make money on the applications. Take a note from the video game industry.

The video games industry sells software at $40-60 a pop (and sometimes more). In this market, application revenues are relatively miniscule; even the App Store only made $1.8 billion last year, of which Apple took $540 million (a number which was reduced by costs for the entire store, including distribution of 150K free apps, as well as application review and marketing costs). You can't make up for hardware sales with software sales in this market. The revenue just isn't there when you're taking a 30% cut on apps which are generally less than $10 (and often are free).

[grover5]

Why should the seven inch cost less? I don't want a 10 inch tablet. I want a more portable tablet. Therefore I prefer the seven inch screen.

[brucep1]

The video games industry sells software at $40-60 a pop (and sometimes more). In this market, application revenues are relatively miniscule; even the App Store only made $1.8 billion last year, of which Apple took $540 million (a number which was reduced by costs for the entire store, including distribution of 150K free apps, as well as application review and marketing costs). You can't make up for hardware sales with software sales in this market. The revenue just isn't there when you're taking a 30% cut on apps which are generally less than $10 (and often are free).

Other than slashing the price, I don't see how RIM gets this into customers hands.
Overall, my main point was that selling at $399 is better than sitting on shelves at $500. Kind of obvious tho, so I claim my previous post to be pretty stupid.

[Economist101]

Why should the seven inch cost less? I don't want a 10 inch tablet. I want a more portable tablet. Therefore I prefer the seven inch screen.

The argument goes like this: if you don't drop the price upon releasing a 10 inch version, you're left with two options. One, sell the 10 inch models for a higher price than iPad models with equivalent storage and die a slow death. Two, sell the 10-inch models for the same price as iPads with equivalent storage, but then explain to customers why the 10-inch and 7-inch PlayBooks are the same price.

But this is all moot, as RIM shouldn't bother building any product you don't want or prefer. Maybe this thread should be closed, as we now have our answer.