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PlayBook in trouble, if not dead, says analyst

Prediction comes just two weeks after RIM promised that PlayBook upgrades would come in October

September 29, 2011 01:36 PM ET

Computerworld - Research in Motion's PlayBook looks to be in trouble, as it appears that the smartphone maker has stopped production of the tablet and is actively considering getting out of the business, says Collins Stewart semiconductor analyst John Vihn.

"We believe [RIM] has stopped production of its PlayBook and is actively considering exiting the tablet market," Vihn wrote in a note to investors. "Additionally, our due diligence indicates that RIM has canceled development of additional tablet projects."

Vihn noted that Quanta Computer recently laid off workers at one factory that manufactures the PlayBook.

RIM officials did not respond to a request to comment on Vihn's note.

If RIM does end PlayBook production, then questions would be raised about its plans to support owners of the device.

RIM officials had said during the company's quarterly earnings call on Sept. 15 that Playbook sales had declined significantly during its second fiscal quarter -- of the 700,000 PlayBooks sold during the six month period, only about 200,000 shipped in the second fiscal period.

While company officials lamented the decline in PlayBook sales at the time, they said tablet updates would be announced during RIM's developer conference in October.

RIM had said new features coming in October include native email, calendar and contacts.

Vihn's RIM notes come in the midst of a volitile period in the tablet business.

For instance, Hewlett-Packard in July said it would kill its TouchPad tablet after only two months on the market. Then yesterday, Amazon launched the $199 Kindle Fire with a special new browser and access to enormous stores of books, movies and other content.

Ironically, many people compared the new Kindle Fire to the PlayBook in size and appearance, since both have a 7-in. touchscreen and a black border.

The iPad is by far the leader in tablets, with 70% of the market, according to Gartner and others.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at Twitter@matthamblen, or subscribe to Matt's RSS feed Hamblen RSS. His e-mail address is mhamblen@computerworld.com.

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