RIM’s PlayBook expected to hit tablet market soon aimed at business users first

MONTREAL – When Research In Motion’s PlayBook enters the tablet market, comparisons to Apple’s iPad will be inevitable.

The BlackBerry maker is expected to put its new device on sale within weeks, well behind the market-leading iPad and other tablets like the Samsung Galaxy that have Android-based operating systems.

“It needs to be different from the iPad,” said PC Magazine mobile device analyst Sascha Segan.

While Research In Motion (TSX:RIM) is expected to report strong quarterly results on Thursday, the PlayBook is seen as a key to its future success.

Segan and other analysts believe the Waterloo, Ont.-based company will play to its strengths and target business users first with the PlayBook.

“I think RIM understands that the consumer market is very tough right now and it’s only going to get tougher as Samsung attacks it more aggressively,” Segan said of the tablet market, which has numerous players.

The 19-centimetre touchscreen device fits into jacket pockets, lab coats and “other popular business garb that won’t fit an iPad,” said Segan, managing editor at PCMag Mobile in New York.

The first generation of the PlayBook will rely on Wi-Fi short-range networks to connect to the Internet, initially without contracts with wireless carriers, for a price of about US$500. It can be tethered to a BlackBerry to access email.

Senior technology analyst Bill Kreher of Edward Jones said there’s a lot riding on the PlayBook and he expects RIM to address its strategy for the tablet when it releases its fourth-quarter results.

“I think the success of the PlayBook is critical for Research In Motion as they prove to investors and consumers that they can innovate and keep up with the latest technology, similar to some of their competitors like Apple and Google,” Kreher said from St. Louis, Mo.

“It’s certainly a natural tendency to compare it to the prominent tablet that’s on the market, which is the iPad.”

Kreher estimates that RIM can sell two million PlayBooks in the next 12 months, with businesses being the sweet spot.

“They have a long, strong track record of dealing large enterprises. I think that will allow them their best opportunity to see traction with the PlayBook.”

As for consumers, Kreher said they’re more likely to prefer Apple and Android tablets with larger screens and more software applications.

“I think the consumer is more compelled to purchase a tablet that is more geared toward entertainment purposes, such as the iPad and (Motorola) Xoom,” he said.

“You also have robust application stores, or app stores, that both Apple and Google have cultivated. I think it provides a significant advantage over other players trying to differentiate their products.”

Analyst Anil Doradla of William Blair & Company said he doesn’t believe the PlayBook will appeal to consumers and also questions its potential in the business market.

“On the enterprise side, one can argue there’s an appeal, perhaps,” Doradla said from Chicago.

“That’s not even clear.”

There’s too much focus on tablets and how the PlayBook will do, he said, adding he considers the next generation of BlackBerry smartphones to be more crucial to RIM’s future.

Doradla expects a new generation of BlackBerry phones to have the same operating system that’s in the PlayBook, based on RIM’s acquisition QNX, a maker of a real-time operating systems used in vehicle navigation systems.

He said he expects RIM’s fourth-quarter results to continue to show its losing share in North America, noting the market is now getting flooded with cheap Android smartphones. If there’s any “hiccup” in International sales, it’s going to be a problem for the company, he added.

Analysts estimates compiled by Thomson Reuters for RIM’s fourth quarter show revenue at 5.58 billion with earnings per share at $1.74.

Almost half of RIM’s subscriber base in its previous quarter was international customers.