How IT Views RIM's Future: Exclusive Research

Research In Motion today said that it plans to let its low-end PlayBook tablet die off. Though the company will continue to sell PlayBooks, the 16GB version won't be available once current inventories run out.

This is actually good news.

"RIM will no longer be making the 16GB model of the BlackBerry PlayBook tablet," the company said in a statement. "The 16GB PlayBook will continue to be available for distributors and retailers while quantities last. We continue to remain committed to the tablet space and the 32GB and 64GB models of the BlackBerry PlayBook continue to be available from our distributors and retailers around the world. There is more value for our customers in the higher capacity models (32GB, 64GB), and as such we have decided to focus our efforts here."

RIM's efforts in the tablet space have been anything but successful. Total sales of the PlayBook aren't known with certainty, but they are well below those of Apple's iPad, which has sold in the tens of millions. Estimates of PlayBook sales are less than two million in the 14 months that the tablet has been available.

[ For more on RIM's future and the challenges it faces, see Slumping RIM Explores Strategic Options. ]

When it launched in April 2011, the PlayBook shipped without core features such as email, contacts, and a calendar. Those important applications weren't added until almost a year later. Without email, the PlayBook's appeal was severely hindered, and this was reflected in its poor performance in the market.

The PlayBook, however, plays a fairly important role in Research In Motion's current OS strategy. PlayBook OS 2.0 is the underpinning foundation of what will eventually be BlackBerry 10. RIM is merging features of PlayBook OS 2.0 and BlackBerry 7 to create the new master OS that will eventually run on both its tablets and smartphones.

Right now, the PlayBook (in addition to the BlackBerry 10 Dev Alpha) are the main hardware platforms on which developers can test their BlackBerry 10 applications. RIM has consistently said that apps that can run in PlayBook OS 2.0 will be able to run in BlackBerry 10. RIM needs as many applications as possible available to BlackBerry 10 when it launches later this year, lest its new smartphone platform suffer a fate similar to that of Palm's webOS.

This means RIM can't drop its tablet business entirely, but it can get away with scaling back on the hardware.

Why is dropping the 16GB PlayBook good news? It's one less device RIM has to worry about for the moment. If the 32- and 64GB versions are still selling somewhere, that's great. Let RIM sell through that inventory so it doesn't have to write down any more stock.

RIM needs to focus all its efforts on BlackBerry 10 and new smartphones, not its ailing tablet business. The more resources RIM can throw at its new platform and devices, the better.

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