RIM's PlayBook Tablet To Cost Under $500RIM's PlayBook Tablet To Cost Under $500

Speaking to Bloomberg, RIM co-CEO Jim Balsillie indicated that the company will debut the PlayBook next year for "under $500." Make no mistake, pricing of the PlayBook will be a key factor in its success, as it goes head-to-head with Apple's iPad and Samsung's Galaxy Tab.

The iPad costs $499 for the 16GB Wi-Fi-only model. Adding memory or a 3G radio raises the price significantly, all the way up to $829. If RIM wants its device to make inroads against Apple's commanding lead in the tablet arena, it has to compete on price. That's why RIM is targeting the $500 mark. But there are a lot of unknowns here.

First, the PlayBook comes in 16GB and 32GB configurations. Which does the $500 price point apply to? The first version of the PlayBook will be Wi-Fi only. RIM will eventually add cellular radios to it, though it hasn't specified which kinds. Given RIM's relationship with the major network operators, each of the four largest will likely receive their own variant of the PlayBook to sell. But for how much more?

The differences between the iPad and PlayBook are significant. The iPad has access to the Apps Store and Apple's well-developed ecosystem. The PlayBook will debut a new platform and new user interface. RIM has been courting developers to get on board with the PlayBook, which relies on Flash and QNX. The iPad has a 9.7-inch screen, where the PlayBook has a 7-inch screen. Where Apple has aimed the iPad at consumers, RIM is targeting business users.

Then there's Samsung's Galaxy Tab to consider. The tab is being offered by all four major U.S. network operators starting this month. Prices range between $400 for subsidized models to $600 for unsubsidized ones. They all have Wi-Fi and 3G radios (Wi-Fi-only version to debut next year). The Tab has an expandable memory card slot and two cameras. It runs Android 2.2.

iOS, Android, and BlackBerry OS are the dominant smartphone platforms in the U.S. Each has its strengths and weaknesses. All three will have a tablet presence by early 2011. Pricing and the operating system will be two of the largest determining factors in how the tablet market shakes out through the first half of 2011.