Analyst Invites You to a Good, Old-Fashioned PlayBook Burning

Now that Research in Motion has told us how much we’ll have to pay for a BlackBerry PlayBook tablet and when we’ll be able to do so, it’s got to convince us why we should bother. And that may prove more difficult than imagined, buzz around Motorola’s Xoom being what it is and demand for the iPad 2 being what it is; consumers are still queuing up to buy the latest iteration of Apple’s tablet, and ship times for purchases made online are hovering at 4-5 weeks.

In a new research note, Stifel analyst Doug Reid argues that RIM has hyped the PlayBook well beyond the earnings-per-share contribution the laggard tablet might potentially make. “Despite minor hardware improvements, the PlayBook with WiFi remains less competitive relative to both iPad 2 and Xoom,” Reid writes, before reciting the same list of perceived flaws that bother other critics. “First, PlayBook’s lack of basic e-mail and calendar functionality (standalone) immediately gates the device’s addressable market to BlackBerry users, a market of only 55 million,” he explains. Second, the PlayBook’s app ecosystem is piddling at best, thanks to a lousy developer experience (which, to be fair, RIM is working to improve). According to Reid’s estimates, PlayBook will have fewer than 100 apps at launch–assuming it doesn’t debut with support for Android apps. Then there’s its screen size. Reid beleives that consumers familiar with the iPad’s 9.7-inch screen will likely view the PlayBook’s smaller 7-inch screen as a deficit.

And finally, the most troubling reason of all: the PlayBook’s ship date. It arrives at market after both the iPad 2–the market-leading tablet’s latest iteration–and the Xoom–which is said to be the first truly comparable competitor to it. Worse, it risks being lost in the flood of tablets launching over the next few months.

Late to market with a first generation tablet and an inferior value proposition. That seems to be RIM’s predicament today. Though who knows. Perhaps there’s some hidden competitive advantage here that’s being overlooked, or one that we haven’t yet seen.