Why not even a $199 PlayBook tablet will help RIM

Holiday shoppers seeking a tablet bargain have another option: Research In Motion has slashed the starting price of its BlackBerry PlayBook line by $300, meaning it’s only $199 for the 16 GB version. RIM’s (s rimm) website says for a limited time, the $199 deal is available at Walmart (s wmt), BestBuy(s bby), Office Depot(s odp), and Radio Shack(s rsh). Some may jump on this deal, but even at $199, I don’t expect RIM to see a massive uptick in PlayBook sales.

It may sound counterintuitive, but the last thing RIM needs is to sell more PlayBooks. Regular consumers, which this deal is targeted at, are likely to end up disappointed by the purchase, which would generate even more negative publicity for RIM’s tablet.

I suspect buyers would be disappointed because they would find no native email client and a limited selection of applications. While the PlayBook runs Flash(s adbe) extremely well, (here’s why) even non-techie people may have heard Flash is now a dead end on mobile devices; Adobe is finally abandoning it. So even this feature has a limited shelf life.

Then there’s the competition at this price point. The regularly priced PlayBook couldn’t fight against the iPad(s aapl) at $499, and I don’t think it stands much of a chance against the new Kindle Fire (s amzn) and Nook Tablet (s bks) priced at $199 and $249 respectively.

With either of these devices, consumers get very similar hardware with the addition of a stronger ecosystem. So what makes a $199 PlayBook more compelling than either? For most people, it won’t be. We recently saw HP (s hpq) sell a boatload of TouchPad tablets at the low fire-sale price of $99 and $149 — enough to take second place behind Apple in tablet sales, reports NPD — but I don’t expect to see the same frenzy around this limited-time PlayBook deal. Time will tell.

RIM’s PlayBook problem isn’t that it isn’t selling PlayBooks, though that’s also true. RIM’s PlayBook problem is that it hasn’t offered a solid reason for people without a BlackBerry phone to buy a PlayBook in the first place. It was priced too high out of the gate and was missing key software features. The PlayBook works great for what it does, but what it doesn’t do is the issue.

Instead of selling hardware at what’s likely under cost, RIM should instead deliver the software updates it promised months ago to bring native email support and the Android (s goog) application player. Then, maybe, a $199 PlayBook might appeal a little more.