Research In Motion has pulled another trick out of its bag in the hopes of kick-starting BlackBerry PlayBook sales.
The company has dropped the price of all three BlackBerry PlayBook models to $299. The 16GB model originally shipped at $499, while the 32GB and 64GB versions initially listed at $599 and $699, respectively.
RIM says the PlayBook sale will end February 4.
For those hoping to buy the higher-end models, RIM's new pricing scheme might be quite welcome. On Amazon, the 64GB option is currently retailing for $367.99. However, exactly why RIM would sell all of its models at the same price, thus pushing customers to the higher end of its spectrum and keeping the lower-end models off wish lists, is a head-scratcher.
In the vast majority of cases, companies sell mobile devices with more capacity at higher prices, due mainly to the added cost of storage, as well as their ability to generate substantially higher profits. In the iPhone 4S, for example, Apple pays just $43 more to double capacity over the 32GB model. However, the company sells the device for $100 more than its less-spacious alternative, helping Apple generate more profit per unit. RIM's new pricing scheme eliminates that ability.
What's worse, at $299 for the 16GB BlackBerry PlayBook version, RIM could risk pricing that version of the 7-inch tablet out of the market. In November, Best Buy started selling the slate for $199 in the hopes of jump-starting sales. The move worked, and the device was unavailable at the store for a period of time. Such high demand for the tablet made some wonder if that was its perfect price tag all along.
RIM's decision to cut the price of the BlackBerry PlayBook comes just weeks after the company said during an earnings call that it would try to be "more aggressive" at promoting its tablet. The company also said that day that it shipped 150,000 PlayBooks during fiscal third quarter, down significantly from the 500,000 units it shipped in its fiscal first quarter and 200,000 units in fiscal second quarter. In addition, RIM announced that it would be forced to take a one-time $485 million hit to its financials to mark down the value of its BlackBerry PlayBook inventory.
Pricing has quickly become one of the easiest ways for tablet makers to attract consumers. After discontinuing its TouchPad tablet earlier this year, Hewlett-Packard marked down the device to $99, and quickly sold out. A second run at that price yielded the same result. Sony earlier this month cut its Tablet S price by $100. Amazon's Kindle Fire, which launched at $199, has been selling extremely well, due mainly to its modest price.
Apple, meanwhile, has been the only major company to eschew price cuts. The company's iPads still retail for between $499 and $829, and unlike the competition, they continue to fly off store shelves at those prices.