The public will get its first taste of a Research In Motion (NASDAQ:RIMM) tablet PC at the Consumer Electronics Show kicks next week. But the BlackBerry PlayBook has more riding on it than success in the burgeoning tablet market — the device represents RIM’s best hope at recapturing its fading market share of the business-customer market that’s being slowly won over by Apple’s (NASDAQ:AAPL) iPhone and smartphones running on Google’s (NASDAQ:GOOG) Android operating system.
The PlayBook also marks a sea change in RIM’s software business, as the PlayBook will be its first consumer device to abandon the BlackBerry 6 mobile operating system for a new platform that needs to distinguish itself from Apple and Google as well as justify RIM’s expenditure on platform developer QNX, a company known for automobile-based operating systems not handheld electronics software.
And there may be trouble on the horizon. On Tuesday, Kaufman Bros. analyst Shaw Wu said RIM is having trouble optimizing key features of the PlayBook. For the company to maintain some momentum going into next year, the PlayBook must be a success out the gate.
Here are three problems RIM must fix before releasing the tablet next year:
Battery Life: Wu singled this out as a major hurdle heading into the electonics show. In a note to investors, Wu said the PlayBook tablet gets “relatively poor battery life of a few hours” of use out of a fully charged battery. The company’s first foray into the tablet field will hardly shine if it can only work for about 3 hours while Smasung’s Galaxy Tab gets 6 hours of use on a charge and Apple’s iPad gets around 10.
While RIM is still committed to a release in next year’s first quarter, Wu doesn’t expect it to see the light of day until May because of the battery life.
Sexy Sells: The PlayBook’s QNX operating systemhas been causing problems since it was first announced at the BlackBerry Developers Conference in October. Rodman & Renshaw analyst Ashok Kumar told Barron’s Tech Trader Daily blog in October that the reason the PlayBook wouldn’t be out for this year’s holidays was that the OS was a “bug-ridden” mess and “not ready for primetime.”
The new software platform obviously has to work properly, but it must do more than that to help RIM combat Apple. If the PlayBook isn’t as aesthetically pleasing as it is functional, it will be hard to capture the consumer market in the same way that Apple has, and how Google is likely to with its Motorola (NYSE: MOT)-made flagship tablet. There is an increasing crossover between the consumer and corporate marketsin the appeal of connected handheld devices — and the PlayBook will need to be sexy to combat the iPad.
Advanced Apps: The PlayBook packs a punch. The Cortex A9 1GHz, dual-core processor made by Arm Holdings (NASDAQ:ARMH) is the most powerful processor among current tablets and should allow for media functionality and multitasking that can’t be matched by what Apple or Samsung are offering.
That said, without software support that takes advantage of all that horsepower, RIM’s tablet will pale in comparison to its competitors. Support of Adobe (NASDAQ:ADBE) Flash 10.1 is a start, but RIM needs to make sure that developers are creating games, office tools, and every other kind of app under the sun that takes advantage of the power the PlayBook has to offer.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here.
