News that Apple is “likely to begin production of 7.85-inch iPads in 3Q12” hit the web today, and it’s seriously bad news for RIM and their recently re-vitalized Playbook tablets. 7″ iPads from Apple? Hey RIM, in case you didn’t see the subtle signs before, today marks an official countdown for you guys. Apple has noticed your little sub-tablet niche and is coming after it. Hard.

So what can RIM do to survive a direct assault from Apple?

1. Like I mentioned before, I think RIM can still make up for lost time by aggressively flooding the market with cheap tablets in the $150-$200 range. Send demo units to teachers, city employees and legal teams. Emphasize the very low cost to get in the door and target companies that can benefit from tablet-based connectivity at a 2-for-1 budget over the iPad.

2. Focus on the growing “I just don’t use my iPad” crowd. There’s a surprising number of iPad owners who just don’t use their iPad because it isn’t what they wanted (or thought it would be). Show the world that the Playbook is what they needed all along. SHOW you can really use office (Word, Excel and Powerpoint) on a Playbook. SHOW how great the web is with a flash enabled browser on a Playbook. SHOW the new OS on the Playbook has everything (Email, Contact List, Embedded Twitter integration, etc). SHOW that the Playbook is available now in a “2.0” form. And SHOW the Playbook is cheaper than most video game systems!

3. Offer a generous unconditional lifetime replacement guarantee. Amazon does this with their Kindle lineup, and as a direct result, people will take their kindle with them to places they would never take their iPad. Think of the sales pitch… “You can spend $200 on a superior product with a lifetime warranty that you can use every day with confidence, or you can spend $400 on a piece of glass with no warranty.”

4. Make the “cloud” part of OS 2.1. Make a system-embedded option where documents, music, etc are all backed up to DROPBOX, or SKYDRIVE or whatever online service a user wants.

5. Get iTunes sync for music and videos. There’s already apps on AppWorld called ItunesSync and ItunesVideoSync that do this. Buy those apps out, integrate the apps into the system, and promote that feature on the Playbook. Make it so that everything in iTunes on a PC (or Mac) can be pulled over to the Playbook with two clicks. Instant ROI / happy customers.

6. Quit the feud with Netflix. Make nice and get them on board. Or go say hello to Amazon! Or Redbox! Get Hollywood on the Playbook’s HD screen and get access to a resource that has a established cross-platform movie and music library. (On a related note, get rid of 7digital. They’re NOT consumer friendly and their web-storefront is outright hostile.)

7. Allow in-app purchases directly to a developer’s website. Advertise online and in tech mags that RIM Playbooks not only allows for any and all in-app purchases, but does NOT take a cut of in-app sales like Apple does. Use this passive monetary incentive to get developers to come around of their own free will.

8. Constantly check the top 20 in the APP store in iTunes and call the developers of those apps. Always make them an offer to come over with a free Playbook to test their apps on. Also go after the Apple developers and the apps that were kicked off Apple’s app store and offer them sanctuary on the Playbook/RIM side.

9. Push multimedia. Buy (or write) a iMovie knockoff and emphasize how easy it is to make movies on the Playbook. Get with HP and buy (or copy) their touchscreen photo editor app. Make the Playbook the tablet/camera/live editing hardware the iPad looks ridiculous trying to be.

10. Allow exploits. Hear me out on this one… if you allow for a Playbook equivalent of Cydia, and let tech-savvy users root the Playbook, you WILL see sales of the Playbook skyrocket. As a by-product of this, support for the Playbook will be more grassroots-based, and the Playbook’s reputation as a “real” tablet will grow exponentially almost overnight.

People love the underdog in a fight. The “we try harder” motto worked for Hertz for a long time, and going against a juggernaut like Apple, in any situation, is definitely a big-time underdog situation.

I think RIM can not only survive, but prosper if they play their cards right. I guess we will all see around 4Q 2012 if that’s true or not.