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PlayBook price cut results in increased market share

A customer holds a Research In Motion's PlayBook tablet computer.

Larry Downing / Reuters/Larry Downing / Reuters

Widespread discounting of Research In Motion Ltd.'s PlayBook tablet computer seems to be working.

The often-criticized device now has 15 per cent of the Canadian tablet market, according to new research, a major jump that coincides with the company's decision to slash its price by hundreds of dollars.

Toronto-based Solutions Research Group (SRG) says its survey of 1,000 Canadians shows PlayBook's market share has risen from about 5 per cent of the tablet market last fall. Apple Inc.'s iPad still dominates, but share of the tablet market in Canada has dropped to 68 per cent from about 86 per cent, SRG research shows. Reports on Tuesday suggested that Apple may be looking into an iPad with a smaller screen, similar in size to the PlayBook.

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Although the holiday shopping season has ended, RIM's deep discounting has not: The device, which was unveiled at a minimum price tag of $500, now regularly sells for less than $300 and some models are selling for just $200. In December, RIM announced a $485-million pre-tax charge to earnings as it lowered the value of its PlayBook inventory.

Although some people who follow the wireless industry believe that PlayBooks are being sold at a loss, renewed sales of the device may keep consumers within the RIM fold at a time when the company is losing significant market share in the smartphone business to Apple's iPhone and devices running Google Inc.'s Android software.

The numbers come from surveys of Canadian consumers as part of SRG's Digital Life Canada Quarterly reports. The jump in PlayBook sales, though not surprising given the lower price, comes weeks before RIM unveils a much-anticipated software update for the device that will bring e-mail and calendar applications to a device that has long been criticized for lacking such features.

Additional features, such as being able to type onto a PlayBook using a BlackBerry phone keyboard, are also being added. Also in February, RIM will launch the next generation of its secure corporate enterprise service, known as BlackBerry Mobile Fusion, which will allow corporate and government clients to manage iPhones and Android devices as well as BlackBerrys.

Kaan Yigit, president of SRG, said he was not surprised that PlayBook sales are improving. He also said that the "current iPad is great at home," but is not "purse or jacket-pocket-friendly" like the PlayBook, which has a 7-inch screen as opposed to the 9.5-inch iPad. Given that, Apple would be "completely misguided" if it resisted making a smaller tablet, Mr. Yigit said.

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