PlayBook: The tablet that was left behind
OTTAWA -- With Apple and Nokia launching new tablet computers Tuesday, observers of fading BlackBerry Ltd. are left to wonder: What if the company had gotten the PlayBook right?
BlackBerry's attempt to expand into the market for larger mobile devices with the PlayBook in April, 2011, was a failure for several reasons. Despite being months later than expected, it was rushed to market, and it showed. The high-priced PlayBook didn't have crucial functions, such as e-mail or calendar; users had to "bridge" to their BlackBerry smartphones for that, making the PlayBook an expensive accessory.
Few developers bothered to create applications for the PlayBook, leaving it outdistanced by Apple, whose mobile platforms drew flocks of developers. The PlayBook also suffered from muddled marketing: Was it a tool for executives, or, as its name suggested, a toy?
It wasn't long before the the PlayBook's slogan ("Amateur hour is over") ricocheted back in the form of widespread mockery. Eight months after its launch, the Waterloo, Ont.-based company wrote down the value of its poorly selling inventory by $485-million (U.S.).
Last April, BlackBerry chief executive Thorsten Heins told an interviewer that "tablets themselves are not a good business model" and declared "in five years, I don't think there'll be a reason to have a tablet anymore." Two months later, he effectively abandoned the market, saying BlackBerry wouldn't move its new BlackBerry 10 operating system onto the PlayBook.
Did BlackBery throw in the towel too soon? The company certainly had the timing right: The year it launched the PlayBook, there were 68.7 million tablets shipped worldwide.
That more than doubled last year and shipments are forecast to grow to more than 400 million units in 2017 - more than the forecast shipments of personal computers - according to market research firm IDC. "The tablet market is really ramping up," said IDC analyst Kevin Restivo.
Arguably, BlackBerry had time, and could have waited six to 12 months to get the PlayBook right. "If they had waited, it would have had better software and e-mail and offered the full BlackBerry experience," said industry analyst Jack Gold.
Launching a better PlayBook might have been a smart defensive play for BlackBery, given that it could have better protected its business of serving large-scale corporate and government customers.
At the time, key executives were bringing iPads to work to allow handy access to documents in meetings; that opened the door for many large customers to let their employees use competing mobile devices instead of BlackBerrys. If the company had offered a more competitive tablet to counter the iPad, perhaps it could have held on to more customers.
"The fact that [the PlayBook] was missing core applications was embarrassing, but they also focused too much time talking about the performance of the devices," said Trevor Nimegeers, a software entrepreneur whose firms have developed apps for BlackBerry in the past. "The enterprise customer, especially executives, just wanted a device they could read board documents on and give to the kids to keep them quiet on long road trips."
That raises a difficult question: was BlackBerry even equipped to launch a successful tablet? "BlackBerry always saw this as less of a mobile computer than a wireless e-mail device, which strikes to the heart of the problem for BlackBerry," Mr. Restivo said.
Still, Mr. Heins may be proven right in at least one regard: Even a successful PlayBook may not have ultimately added much to the bottom line. Tablet markers are facing pricing pressure, as the costs of component drops and competitors crowd into the market. It is "absolutely" becoming a low-margin business, Mr. Restivo said.
Close: $8.48, down 4¢
ROB Insight is a premium commentary product offering rapid analysis of business and economic news, corporate strategy and policy, published throughout the business day. Visit the ROB Insight homepage for analysis available only to subscribers.
BBM IN HIGH DEMAND
Downloads of BlackBerry's BBM chat app for iPhones and Android devices have topped 10 million in just one day.
"It's been 24 hours since we resumed the launch of BBM for Android and iPhone," Andrew Bocking, BlackBerry's BBM chief, said in a blog post Tuesday. "And what a day it's been."
BlackBerry resumed the launch of the free app Monday, having had to stop it in late September when an unreleased version for Android was posted online.
The company instituted a line-up system, basically to wait your turn for access to the chat service, which allows users of Apple Inc.'s iPhone and devices powered by Google Inc.'s popular Android to use the instant messaging service for free.
The action for BlackBerry, which is in the midst of a sale process for all or part of the company, illustrates the popularity of BBM.