RIM to Cease Production of BlackBerry PlayBook? 'Pure Fiction' Responds RIM

By Erin Harrison September 30, 2011

On the heels of several retailers cutting prices on the slow-selling BlackBerry PlayBook, one industry analyst claims that Research In Motion is halting production of its tablet – and may throw in the towel on production of such a device altogether, according to media reports.

Collins Stewart chip analyst John Vinh told Business Insider that RIM is leaving the tablet business, however, it’s important to note that Vinh is a chip analyst, not a RIM analyst.

A Barron’s blog quoted Vinh as writing, “While Quanta last week acknowledged that it had laid off a significant number of production workers from a factory focused on producing the PlayBook, our research indicates that the ODM has essentially halted production of the tablet. Additionally, our due diligence indicates that RIMM has canceled development of additional tablet projects.”

In an update, Business Insider reported that RIM issued this statement, “RIM doesn’t typically comment on rumors, but any suggestion that the BlackBerry PlayBook is being discontinued is pure fiction. RIM remains highly committed to the tablet market.”

Responding to slow sales of the PlayBook, retailers this week slashed prices on the tablet: Staples knocked $200 off the price of each slate, $100 in instant savings and $100 in the form of a mail-in rebate; Office Depot is offering the same deal: Each PlayBook model is available for $100 off MSRP, and then customers get another $100 back in the form of a rebate.

Earlier this month, RIM reported a sharp drop in net income and revenue and said it sold far fewer tablet computers than it expected, TechZone 360 reported. RIM officials said Sept. 15 that its net income was 419 million, or 80 cents per share, in the three months ended Aug. 27. That’s down from $796.7 million, or $1.46 per share, a year ago.

However, it’s not all grim news for RIM: following whispers that billionaire investor Carl Icahn has taken a stake in the company, shares of the BlackBerry-maker surged earlier this week, TechZone360 reported.

As the Waterloo, Canada-based smartphone maker struggles to stay relevant amid two dominant mobile operating systems – Apple’s iOS and Google's Android – traders “are saying Icahn has taken a stake, but nothing is confirmed,” BGC Partners tech analyst Colin Gillis told Reuters, as the shares grew $1.42, or 6.5 percent, to $23.04 on the Nasdaq.

For now, however, maybe RIM should focus on doing what it had always done best: making a good smartphone.



Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell

Executive Editor, Strategic Initiatives

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