Shares of BlackBerry maker Research in Motion Ltd. slid further Thursday after the company said it remained committed to its PlayBook tablet computer despite lackluster sales and an analyst said a Taiwanese company had laid off workers at a factory focused on making it.
THE SPARK: Collins Stewart analyst John Vinh said in a research note Thursday that he believed Research in Motion "has stopped production of its PlayBook and is actively considering exiting the tablet market."
The company moved quickly to say that wasn't true. "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."
Vinh said Taiwanese company Quanta Computer Inc. had laid off workers at the factory that makes the device and said his research indicates the company had essentially halted production of the tablet.
THE BIG PICTURE: Research in Motion is fighting to stay relevant amid two dominant mobile operating systems, the iOS created by Apple Inc., and Google's Android, which it shares freely with handset makers.
The company, based in Waterloo, Ontario, had dominated the corporate smartphone market but regular consumers have been drawn to phones with big touchscreens like the iPhone and Samsung Galaxy, which runs on the Android platform.
The company said on its quarterly earnings call this month that it had sold about 200,000 PlayBooks in the three months through August, disappointing analysts. Its QNX tablet software platform faces an uphill battle to gain traction.
THE ANALYSIS: The confusion about the PlayBook is a problem Research in Motion could do without in a fast-moving tablet market. It is a weak competitor in tablets. Apple sold almost 29 million iPads from April 2010 through June of this year and research firm Gartner Inc. says three of every four tablets sold this year will be iPads.
Amazon.com Inc. on Wednesday unveiled its tablet competitor, the Kindle Fire, which sharply undercut its competitors with a $199 price tag that is less than half of what others charge. Amazon is seen as a strong competitor since it offers a range of services on its device that merges well with its online store, which sells books, movies, TV shows and music. The Kindle Fire also operates on Google's Android software.
SHARE ACTION: Research in Motion shares fell $1.13, or 5.2 percent, to $20.77 for its second day of losses after a brief bump Tuesday based on speculation that Carl Icahn had taken a stake in the company. Shares have been on an almost steady decline since hitting a recent peak of $70.54 in February and cresting slightly at $33.54 in early September.