RIM Will Combat Lackluster PlayBook Sales With New Software and Pricing

Poor sales performance of the BlackBerry PlayBook only managed to drag down the company’s second-quarter results, which came in at the low end of forecasts.

But Research in Motion said during the investor call this afternoon that it will try a combination of offering new features and a lower price to spur new sales and reinvigorate interest in the device.

The 64 gigabyte PlayBook currently sells for $700, and a 16GB model costs $500, but they lack some standard applications –including native email, calendar and contacts — and common entertainment features. Not to mention that during the quarter the PlayBook was facing steep competition from the HP TouchPad, which was discontinued and marked down to a bargain price of $99.

During the second quarter, RIM said, PlayBook shipments totaled just 200,000 units, well below what many analysts had been hoping for.

Going forward, RIM will implement promotions and rebates to spur sales, and will roll out a significant over-the-air software update, which it will show off next month at its developer conference, and release shortly after.

During the call, co-CEO Mike Lazaridis said rather than trickle out the updates for the PlayBook, RIM plans to bundle a number of features together to make a bigger impact. Updates will include native email, calendar and contacts, an Android app player, which will enable the tablet to run some applications from the Google operating system, an enhanced Web browser and a BlackBerry video store, which will offer access to 10,000 movies and TV shows.

Most of the call was spent praising the recent launches of the latest BlackBerry 7 devices, which were already comprising 35 percent of sales in North America by the final two weeks of the quarter, the company said. So far it has launched seven BlackBerry 7 devices, with more than 90 carriers in 30 countries.

Despite questions about RIM’s future, and the lack of timing being announced for its next-generation operation called QNX, the BlackBerry maker was still able to grow its subscriber base 40 percent year over year to 70 million. Lazaridis declined to mention timing of the release of the first QNX phones, which will miss this year’s holiday season, but said RIM will be prepared to show off prototypes in the not too distant future.


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