BlackBerry maker Research in Motion has officially discontinued the 16GB version of its struggling PlayBook tablet. The company announced it will phase out the Playbook once retailers finish selling the quantities they have in stock. RIM said only the 16GB version will be discontinued, but it will continue to manufacture the 32GB and 64GB versions.
"RIM will no longer be making the 16GB model of the BlackBerry PlayBook tablet. The 16GB PlayBook will continue to be available for distributors and retailers while quantities last, RIM said in a statement to Endgadget. "We continue to remain committed to the tablet space and the 32GB and 64GB models of the BlackBerry PlayBook continue to be available from our distributors and retailers around the world."
Tough Competition
The 16GB PlayBook tablet cost $199, while the 32GB and 64GB models come with a price tag of $249 and $299, respectively. The discontinuation of the 16GB version indicates that RIM could not boost consumer interest and overall sales, not even with a low price tag. The PlayBook faced serious competition from Amazon's 7-inch tablet, the Kindle Fire, in the fourth quarter of 2011 and the first quarter of 2012. The Kindle Fire has half the storage capacity of the discontinued PlayBook, but Amazon's retail presence and service gave it a significant advantage. In addition, RIM launched the PlayBook tablet almost a year ago without important basic features such as email, leaving many consumers disappointed.
When it comes to Apple's iPad, RIM stood no chance to compete. The company sold more than 500,000 PlayBook units in the quarter to early March, while Apple sold 11.8 million iPads in the three months to late March. Amazon stood somewhere in between with its Kindle Fire.
Committed to the Tablet Sector
RIM, however, will keep trying to succeed in the tablet sector. Not only will it continue to manufacture the 32GB and 64GB models, but the company reportedly also plans to launch another tablet. The 16GB version was just not making things happen for RIM. "There is more value for our customers in the higher capacity models (32GB, 64GB), and as such we have decided to focus our efforts here," said RIM.
RIM's share of the U.S. smartphone market has seen a dramatic decline over the last two years, dropping from 44 percent to just 12 percent. Overall RIM has dropped nearly 75 percent of its market value since last June, and last week the company told investors that it may see an operating loss for the first quarter. In an effort to turn things around, RIM hired bankers from JPMorgan Securities and RBC Capital Markets to advise it towards a financial "transformation."
