Probably because their version of the "country" didn't just experience a recession. Wealthy people are wealthy, even at times like this, and in many markets the items favored by wealthier people are less sensitive to "prevailing economic conditions" than less expensive items favored by the occupiers.
Exactly! LVMH had record sales this this year. And there's now a 2 year waiting list on Bentley's in Beverly Hills.
On the other end of the spectrum 'vice' purchases are also way. Alcohol sales, tabacco(mainly in the form of cigarettes), firearms also do extremely well in a down economy.
My response was to the poster who felt that Apple sales would eventually decline because of their perceived high prices. It's all relative at the end of the day, and I wouldn't expect to AAPL lose market share any time soon.
The PRODUCT is not a "disaster"! Stop it!
Now, the execution most certainly has been. I've said it elsewhere: RIM had no business pricing the Playbook on par with the iPad. The App Store does make iOS more valuable and it was arrogant for RIM to think the Blackberry brand would make up for that on its own. They likely would have saved themselves a world of hurt with introductory pricing of $150 less for each SKU. At that pricing they would have been taking a modest loss on the 16GB units (making it the traditional "loss leader"), but making a small profit on the 32s and be comfortable with the 64s. It certainly wouldn't have cost them a half-billion writedown.
And at that price-point customers would have been impressed with the design, performance, and overall quality. Preferably, this would have been accompanied by native PIM from day one as well, but that would have been a lot easier to forgive at a lower price-point too.
Look, Econ, I still believe fairly passionately in this product. You make some very valid points about how badly RIM has managed the Playbook. Myself, I see the kind of arrogance that can only come from an overblown ego or two, and I think RIM's board is getting set to address that.
But the PRODUCT is actually pretty good even in its current form. Good enough that there's still a decent chance of rehabilitating it.
I don't own an ipad, I also don't own a playbook. I have however owned an ipod touch since they were first available, and purchased a Touchpad during their firesale last summer.
When I purchased the Touchpad, what I wanted from it was a larger-then-ipod web brower/video player/ebook reader, and good battery life. I didn't want anything more from it, didn't even think or care about future value from an existing ecosystem, and with knowing it was from a reputable company, my sole expectation was that it would perform at least moderately smoothly. I'd paid $100, and would have paid $200 without blinking.
If it had been priced at $250, I would have had to think about it. Over that, and I would have passed in favour of saving for an Ipad.
I don't need a 2nd tablet, and while i'd think about it with the Playbook at about $150 or less, it would take a bit of consideration. I passed on their sale price at $199 *because* I already had a tablet. If I didn't have one, I would have purchased the 16GB.
So... When it comes to future pricing. One question would be whether you're aiming for people buying a 2nd tablet for the house, or the first tablet. I'd put pricing on the low end at $150-$250.
The big question then is whether you can build and retail at those prices, and still make a profit.
That was said of the iPhone, before Android phones took over. At some point, tablet prices will affect the market more (as tablets are seen as a commodity item) and Apple's market share will begin to shrink. Of course, Apple won't care. They don't have to sell tons to be profitable. Nothing wrong with that.
Motorola Droid Pro with "secure" Android Froyo 2.2
DROID Pro by MOTOROLA - Business Cell Phone - Tech Specs - Motorola Mobility, Inc. USA
Read Tips 1-2:
Getting Started With Kindle Fire Development
"Tip 1: Kindle Fire has no Google services. In particular, when developing apps make sure to use the AOSP version of the SDK — not the Google APIs version. For example, assume any Google specific intents will fail.
Tip 2: A Tablet Without Honeycomb or Ice Cream Sandwich
Amazon built the Kindle Fire OS using Android 2.3.4, Gingerbread (API Level 10). This is not a tablet-optimized version of Android...
...
Conclusion
Amazon’s Kindle Fire is a top selling popular Android tablet. It has no Google services and the platform has been customized by Amazon, so supporting this device may not come as easily as other Android tablets."
Your pricing wasn't what I was addressing, since they're inline with firesale prices, like you're saying. There's no analysis necessary for that. You just priced the Playbook to what RIM decided. RIM must know what they're doing, right? Playbooks are selling and you bought one, even considering two, even without a full Android App Market in the future (you know that, right?).
$5 for Angry Birds is not RIM's decision. That's why I question whether you understand where apps come from. Address your issue to Rovio. Hulu is specifically blocking the Playbook's browser. Address your issue with Hulu or get SimpleBrowser and set the User Agent to FireFox [edit: SimpleBrowser isn't enough to fool Hulu as it seems to detect the Flash platform. My bad. Complain to Hulu.].
You've been waiting almost a whole year? Sounds like you just purchased your Playbook. $249 for 32 GB just recently happened.
Maybe Motorola should sue Apple for development not in good faith and conflict of interest... otherwise, it's just as much Apple's baby...
And that upside is pulling people into their ecosystem and later upgrading them to Kindle Fire 2, 3, 4, ...
You don't need amazon prime for the Fire.
If you want a tablet to read ebooks, watch your films/video's, listen to music, and browse the net, the Fire does it just as well as the playbook (admittedly the Fire has less storage locally, but then it is slightly lighter).
I can take pictures, use GPS, do video chats, etc on my phone, I don't have to have it on a tablet.
Sure, the PB has a whole host of extra bits and pieces but for a lot of people, it doesn't actually matter. The smart phone has given people more ways to get those things.
To most users (not geeks), it is function that matters. The PB's extra h/w is not currently getting translated into enough additional functionality at the moment and that is what matters.
It is a shame because QNX is great. I returned my iPad2 because the size meant that it didn't fill a niche for me (like a 7" tablet does). The only reason I have a PB is because I borrowed it from work to get use to the Fire form factor (although now, I am sorely tempted to keep the PB and forget all about the Fire). But even I have to admit, the iOS interface is fantastic, and QNX is not far behind. Without the apple logo though, without the Android marketplace, and without the Amazon content and name, the PB is really up against it out in the big wide-world.
Hence it needs a price-point lower than the Fire.
Saying all that, I am really impressed with the PB, but perhaps like most people out there, I would never have considered buying one (if I couldn't borrow one from work first). The lower price-point is essential (at this point) to get others to think likewise.
I think you make some valid points. I especially agree with points on price.
I question whether their future entails hardware of any nature. Scrap the PB and phone manufacturing in the future whilst licensing BB10.
Interestingly, if anyone here has the misfortune to use Good Technology, they started as a hardware provider like BB, and then switched to software only providing (badly) encrypted email on iPhone/Android, etc.
I can also see other devices losing their hardware dependence. Why carry around a physical PSP when a modern smartphone is probably MORE than capable of providing enough grunt?
If, by PSP, you mean the Playstation Portable, I think the disappointing sales numbers of the Vita to you statement.
I don't think the price matters near as much as the advertising. RIM needs to convince people they need a tablet if they want to be either a.) cool or b.) productive.
People will buy whatever the TV convinces them they need to buy, regardless of price.
Before determining the price, we should do what RIM and HP never did: determine the market. Who is the PB for? Is it for BB users with iPad envy? That is a particular product at a particular price. Is it for BB enterprise customers who might want a companion device for their phone? Is it for the upscale consumer, the great unwashed using a feature/messaging phone, the small business pro?
RIM and HP were all over the place with their message. When Apple introduced the iPad, SJ made a lengthy appeal for what the product was intended. He made the bold statement that if it was not the best experience for those specific things, it had no reason to exist. You may argue if it was successful at those things, but it definitely had a reason to exist. The market agreed. No one since that time has provided any such reason for their product to exist. They only exist because the iPad exists. The market has responded to them by purchasing more iPads.
I am guessing with all this talk of music, movies, and games, RIM wants to be in the consumer market. Now, the challenge is figuring out if they are after the low end or the high end. If they are after the high end of the market, they ought to produce a high end product and price themselves accordingly. I think this would be a tragic mistake. If they are after the lower end of the market, they have to be at $199 or less.
There is no middle ground. $299 is an overpriced KF. $399 is a discounted iPad 2. Between $200 and $500 is no-man's land. Also, there is the profitability problem. A tab meant to be profitable at $299 is nothing more than a KF, which Amazon is selling at a loss. An iPad competitor is expensive to produce, not to mention the millions in R&D that RIM is simply not going to spend.
Ultimately, the question of price must give way to the question of why. Why is RIM even making tablets? For whom are they intended. What are they supposed to do. Only after those questions get solid answers will we be ready to speculate on price.
Well said...
Or to put it more simply, "what can a tablet do that existing devices can't?" Let's remember that Microsoft tried very, very hard to make tablets mainstream several years ago. They failed, but it's clear that tabs are very useful in certain vertical applications.
The advent of e-books has likely been the tipping point for tabs; rather than an e-reader device that either can't surf the web or does it poorly, many users prefer a device that can surf, present e-books, and other media.
There IS kind of a chicken/egg argument here, though. What Apple has done indisputably better than any competitor is build an appealing app base. They were prescient enough to have that infrastructure in place for the iPad touch and the iPhone.RIM and HP were all over the place with their message. When Apple introduced the iPad, SJ made a lengthy appeal for what the product was intended. He made the bold statement that if it was not the best experience for those specific things, it had no reason to exist. You may argue if it was successful at those things, but it definitely had a reason to exist. The market agreed. No one since that time has provided any such reason for their product to exist. They only exist because the iPad exists. The market has responded to them by purchasing more iPads.
Apple is not the only company, though. And there are many users who wouldn't buy Apple if their lives depended on it. Apple did a great job of a) executing on the whole notion of the "app" and its infrastructure and b) creating a market where none existed.
BTW, Jobs was famously disdainful of marketing studies and focus groups, and saw little point in testing out design concepts with consumers.
Content is king. If nothing else, the iPad proves that. If the consumer hook is content, then what's wrong with RIM using that to improve the appeal of their product? $299 is an overpriced Kindle Fire? Not when you consider that the KF doesn't have any horsepower as a gaming platform. Remember, Amazon is a content company. They sell books, movies, and music. They're not really into games.I am guessing with all this talk of music, movies, and games, RIM wants to be in the consumer market. Now, the challenge is figuring out if they are after the low end or the high end. If they are after the high end of the market, they ought to produce a high end product and price themselves accordingly. I think this would be a tragic mistake. If they are after the lower end of the market, they have to be at $199 or less.
There is no middle ground. $299 is an overpriced KF. $399 is a discounted iPad 2. Between $200 and $500 is no-man's land. Also, there is the profitability problem. A tab meant to be profitable at $299 is nothing more than a KF, which Amazon is selling at a loss. An iPad competitor is expensive to produce, not to mention the millions in R&D that RIM is simply not going to spend.
Ultimately, the question of price must give way to the question of why. Why is RIM even making tablets? For whom are they intended. What are they supposed to do. Only after those questions get solid answers will we be ready to speculate on price.
You defeat your own argument. You try to claim that everything between a Kindle Fire and an iPad is "no-man's-land", but that's exactly the territory that's open to competitors. The Android tablets are good, but generally speaking the Playbook performs better and has a better UI. Given the response to the discounted prices it sounds like that's appealing.
Not to speak for dandbj13, but I think he was referring to price point rather than tablets themselves. I agree with him on that. I think the pricing structure for the near future has been decided. To be successful, companies may now note that $300 is too expensive of a price.
I still think that for the rank and file consumers (the ones who truly determine the viability of any product), things like UI mean little. They will like the UI of the product that gives them what they want. This comes from someone who actually likes the PB UI.
I don't think you quite understand my argument. How the PB is selling at $299 is irrelevant as it is likely losing money. If you build a tablet to meet a $299 price point and be profitable, what you have built is a KF, or something very much like it. You cannot build the current PB and sell it profitably at $299. At $349-$399, you are in direct competition with the discounted iPad 2. It doesn't matter what you build. In that price range, you will lose. You either have to go cheap or go super high-end niche, or go home.
I agree with him. For the time being. The majority of consumers either want an lesser cost device or they want an iPad.
I also agree with you. 'No-Mans' land is rife with potential. But it's not territory that will be settled by copying either the high-end or low end devices.
Which may mean that the device that does indeed settle this territory is the one we haven't seen, because it hasn't been invented yet.
No offense, but this is way off. There isn't a thing the iPad can do that can't be done on another device. The same is true of every other tablet. So while your line certainly is "simpler," it's not an accurate summary of the original comment.
You write as though the above have a similar motivation, but in fact they occurred for drastically different reasons. Marketing studies and focus groups can be useful, but we've all heard the Henry Ford quote and it's dead on. As for testing out design concepts with consumers, a minor reason is what you describe, but the primary reason is that the company doesn't discuss unannounced products externally, and in most cases doesn't announce them until right before they're ready to launch. The most notable exceptions are the Apple TV, the iPhone and the iPad, though the announcements of those products were likely dictated in part by the need to run them through the FCC, where they would certainly be leaked.
No doubt. How are those competitors doing, by the way? Are any of them profitably selling tablets today, or are they all talking about things they are going to do, sales they're going to make, and profits they are going to earn?
Yeah that better performance and UI hasn't exactly propped up sales; the fact that RIM began selling all units at the same price is all you need to know about the PlayBook's lack of market success.
Mr. Eggs, if that's your real name, :) I admit that I am discounting the option of building something for that price range largely on the basis that I believe Apple will continue to offer the iPad 2, not at $399, but $349. That is what the original iPad went for on refurb when the iPad 2 came out.
I am also basing my assumption on the idea that there is no tablet market, just an iPad market. This assumption is easily tested by a thought experiment. Offer the iPad at the same price as the cheapest competitor. In that eventuality, the nearest competitor gets fitted for cement boots. $349 kills everything from $300 on up.
I admittedly could be wrong about either of those assumptions. However, to date, the market has not proven me so. Perhaps RIM will be the ones to prove that there is a substantial market of people who want something other than the iPad and not just something cheaper.
Eliminate the 16 and 32 gig models. Fire sale them until gone. Production stopped on these two models ASAP.
Only have the 64gig for $299.00 at OS2 launch.
Run this through the Spring. Dry up the in inventory.
Q2 2012 stop production of current PB. Leave them wanting more if OS2 is good.
Mid Summer, late Summer introduce the PB2 with hardware (leading edge) upgrades etc..
Keep the original PB relevant. EOL after 3 years.
Just a thought...
Tim
Actually, it's Mr. Dozen to my friends. :cool:
Possibly. But can they do it with a device that, at least in it's current form, peaks when used in conjunction with a BB phone?
I suppose that is possible. I don't see it, though. A tablet is not an accessory for a phone. It didn't work when HP tried to link the TP to the Pre3 with Touch to Share. I think the iPad, and now the KF, gain popularity partly because they do not require another device to get the most out of them. I believe that really hurt the PB.
Another challenge is that with that plan, you would be limiting the potential market to RIM customers. That is another dangerous strategy as many BB users are so because that is what they got at work for free, or because it was the inexpensive option. That is not the market of people who buy expensive accessories, even if they wanted them.
Believe it or not, I would love to be wrong about a lot of this. I get no benefit from watching RIM break themselves on the Apple iceberg. Is it possible for RIM to produce a tablet that customers in Indonesia can afford, and Americans will want, and shareholders will applaud? I just don't think so.