RIM Places its Bets on PlayBook Tablet Computer Against iPad

By Reuters

(Reuters) - If all goes according to Research in Motion's plan, its touchscreen PlayBook will halt the erosion of its hold on the corporate must-have gadget list, offering safety and control to a security-conscious audience.

RIM, whose BlackBerry has long been an essential corporate companion, is banking on interest from enterprises as it readies to move small numbers of the hand-sized tablet to select clients later this year.

"When you're transmitting sensitive member information that was our number one priority -- to make sure we had the best security protocols," said Tom Reid, a senior vice president at Sun Life Financial, which plans an initial order for between 500 and 1,000 devices and may expand that.

The Canadian insurer, which has C$44 billion ($43 billion) under management, says it will use the device to enroll employees to their company's retirement plans securely.

ING Groep's Canadian unit is developing a consumer-facing banking application for the PlayBook and considering using the device to replace laptops.

"If RIM lives up to what it has promised -- seamless, out of the box connectively to the existing infrastructure -- we can address a business need very, very quickly without making major investments," said Charaka Kithulegoda, chief information officer for the unit.

BlackBerry-maker RIM unveiled its 7-inch touchscreen PlayBook in September. But the gadget, a possible competitor to Apple's consumer-friendly iPad, won't go on sale until early in 2011, missing the busy holiday season.

Analysts have estimated RIM will ship between 2 million and 4 million PlayBook tablets in its fiscal 2012, which begins in late February 2011.

The iPad has been an unqualified hit since its launch last April -- Apple has sold more than 7 million iPads already, and analysts expect another 5 million holiday-quarter sales.

"RIM will fit in very nicely in those segments where security is paramount," said analyst Carolina Milanesi from Gartner, which expects total tablet sales to balloon to 54 million in 2011 and more than 100 million in 2012. "For a lot of enterprises, that is not so important."

Detailed projections for such a nascent market are difficult, but some analysts suggest enterprise use may account for up to 40 percent of the overall market.

Success of the PlayBook would go some way to countering the serious threat that RIM faces to its stranglehold on corporate communications as companies let employees use Apple's iPhone and smartphones running on Google's Android operating system for corporate email.

Apple has said 65 percent of Fortune 100 companies are already deploying or piloting the iPad, including Procter & Gamble, Hyatt, and Novartis.

Samsung, Dell and Hewlett-Packard have launched competing devices and others are expected from companies including Acer and Lenovo.

But for some, RIM -- with its ability to offer security and give companies control over all devices, or individual ones -- remains the only choice.

Philadelpia-based law firm Stradley Ronon Stevens & Young, which employs 195 attorneys, cited legal requirements to protect client information to explain its interest in the PlayBook.

"Can you imagine how embarrassing it would be to call up one of our clients and say we've lost a device with your content on it and we're unable to remote wipe it and the data wasn't encrypted," the firm's director of information technology, Michael Folkes, said in an interview.

He said some attorneys were using personal iPads, but the firm does not allow their use for client data and would not consider supplying them due to a lack of control.

"Once we start to offer the PlayBook as a business tool, I think we will find that the iPad user after a few months will come back and say can I get a PlayBook too," he said.

Stradley Ronon will receive two trial units early next year and, assuming the firm is happy with the devices, would likely place an larger order no more than six weeks later.

But it's not just lawyers, bankers and pension funds who are eyeing the PlayBook, which RIM says will sell for below $500 -- the retail price of a basic iPad.

Lake Travis school district in Texas may provide more than half of its 7,000 students with PlayBooks to access online curriculum in a cheaper alternative to laptops, assistant superintendent Sean Casey said.

Shares in RIM were up 2.2 percent to $57.14 on the Nasdaq and 1.9 percent higher at C$58.38 on the Toronto Stock Exchange by early afternoon on Thursday. The shares have jumped 35 percent from a trough in August but are 14 percent lower than at the start of the year.

(Additional reporting by Gabriel Madway in San Francisco) 

This article was originally published on 2010-11-19