PlayBook on the Shopping Channel

A few days ago in RIM was selling the BlackBerry PlayBook on the Shopping Channel in Canada. While this is not something that I expected, I am endlessly fascinated by the concept.

This was first brought to my attention by former director of developer relations Mike Kirkup in a Twitter post. CrackBerry then linked to a video. Best guess is that they sold over 2,200 PlayBook bundles over the course of the day at $400 each.

First of all they were not just selling the base model PlayBook. Instead they were selling the 32GB PlayBook with the rapid charger, a case, and a HDMI cable. I understand the bundled items. Markup on things like cables and cases is much higher then it is for electronics so including these allowed RIM to get better margins, and to bump up the retail price of the package (which the sale price is compared to). But why the 32GB version? If RIM wanted to wow with low prices, they could have gone with the 16GB version. If RIM wanted to get the best margins they could have gone with the 64GB version. Instead they took an odd hybrid route. (Maybe they have a greater amount of spare inventory at the 32GB level).

The bill of materials (BOM) on the 32GB PlayBook is estimated to be around $330. Assuming a BOM of about $40 for the accessories, and another $10 for shipping costs RIM probably made a (small) profit on each one of these units. Which is far better then the money they were losing on their black friday sales. And the actual unit sales were significant. 2200 sold in one day is impressive once you consider that in early November (prior to the price drop) the PlayBook was only selling around 3300 units per day.

And then there are the demographics. As someone whose livelihood is based on selling apps the question is what does this demographic think of buying apps? I have no idea. Hopefully people willing to spend $400 to impulsively buy something off the TV won’t think twice about spending $3 to download a game. But really I have no idea.