RIM's PlayBook will take on Apple's iPad with a price under $500

In a conversation with Bloomberg, RIM co-Chief Executive Jim Balsillie said the Playbook will go on sale in North America in the first quarter of 2010 for "under" $500. Apple's iPad has an entry price of $499.

"The product will be very competitively priced," Balsillie reportedly said.

RIM teased the PlayBook, a 7-inch multi-touch tablet, in September. It will run the all-new BlackBerry Tablet OS on a 1024-by-600-pixel display.

The PlayBook's sub-$500 price will not likely be achieved with a carrier subsidy, as the first-generation device will not offer integrated 3G or 4G data connectivity. RIM has said it plans to add built-in cellular wireless to the tablet in the future, but initial users will rely on Wi-Fi or shared data from a BlackBerry.

The PlayBook will also have a screen smaller than Apple's 9.7-inch iPad display. Last month, Apple CEO Steve Jobs criticized iPad competitors like the PlayBook for their 7-inch screens, suggesting the screen size was selected in an effort to compete with Apple's competitively priced iPad.

"When we make decisions on 7-inch tablets, it's not about cost," Jobs said. "It's about the value of the product when you factor in software." He said that Apple's own testing has found that a 7-inch screen is too small to be functional for users.

Samsung has its own 7-inch tablet, the Galaxy Tab, set to debut this week on Verizon, the largest wireless carrier in the U.S. But that Android-based device has a starting price of $600 with Verizon, $30 cheaper than Apple's $630 iPad with 3G, or the iPad-MiFi bundle Verizon now sells.

But like the first-generation PlayBook, Apple's $499 iPad does not offer integrated 3G connectivity. The 16GB 9.7-inch Wi-Fi iPad is just $499.

Two other U.S. wireless carriers, Sprint and T-Mobile, also offer Samsung's Galaxy Tab at a price under $500, thanks to carrier subsidies. The device will cost $399.99 and will come with a two-year service agreement for 3G data.