RIM calls rumours of WiFi-only PlayBook’s demise ‘pure fiction’

 
UPDATE (July 18, 2011 5:44 p.m. ET): Research In Motion has released a statement dismissing rumours that the company is planning to discontinue the WiFi-only version of the PlayBook as “pure fiction.” In a statement, RIM officials said, “Over the past month, the PlayBook has launched in 16 additional markets around the world and further rollouts are planned for Southeast Asia, Western Europe and the Middle East in the coming weeks.”
As Research In Motion Ltd. prepares to launch a series of 4G BlackBerry PlayBooks this fall, unconfirmed reports suggest the Waterloo, Ont. company may be planning to cease production on the original, WiFi-only, PlayBook.
Shares of RIM fell about 3.5% on the Nasdaq Stock Market in New York on Monday after rumours surfaced that RIM could be set to stop producing the original version of the BlackBerry PlayBook tablet — which features a WiFi connection, but lacks the ability to connect to the Internet over next-generation cellular networks.
RBC Capital Markets financial analyst Mike Abramsky said the stock slide was due to media reports claiming RIM is considering stopping production of the WiFi-only PlayBook and that the shift in strategy could be an effort on RIM’s part to focus its energies on a number of new product rollouts slated for later this year.
“Weak PlayBook sales may not be the only reason — RIM appears to be focusing resources around 3G/4G PlayBook, QNX ‘superphones,’ and upcoming BlackBerry launches,” Mr. Abramsky wrote in a note to clients on Monday.
During its last quarterly conference call, RIM revealed it sold about 500,000 PlayBooks during the first six weeks of sales, in line with what analysts had expected, but nowhere close to the one million iPads Apple Inc. sold in less a month after debuting its first touchscreen tablet in April, 2010.
While it might make sense for RIM to cancel the WiFi-only PlayBook in order to focus its efforts on the BlackBerry smartphones and PlayBooks it has on tap for this year and the QNX-powered devices expected to launch next year, it seems unlikely that RIM would stop producing an entry level, WiFi-only PlayBook.
Apple offers three WiFi-only iPads in addition to its WiFi + 3G models, and there appears to be steady demand for WiFi-only tablets.
Still, Mr. Abramsky said there are several reasons why RIM could be scaling back PlayBook production:

In our view WiFi PlayBook build reductions may: 1) reflect a pullback in production following global channel fill to 16 countries; 2) align channel inventory with slower than expected forecast sell-through; 3) accommodate a shift in production to the 3G/4G PlayBook (launches expected in 2-3 months); and 4) reflect expectations that 3G/4G PlayBook may outsell/cannibalize WiFi-only models (considering carrier alignment and customer/enterprise feedback).  RIM also appears to be re-prioritizing its R&D from PlayBook to its QNX-based ‘superphones’ expected early 2012, considering its importance to stemming US share losses.

RIM has not commented on the reports and the company tends to decline comment on any product rumours.
Shares of RIM have suffered a beating this year, shedding nearly 60% of their value as the BlackBerry maker has struggled to keep pace with rivals Apple and Google Inc.
In addition to the lacklustre rollout of the PlayBook, RIM is also suffering from product delays and declining developer support as the company attempts to transition from its BlackBerry operating system to the QNX software that powers the company’s PlayBook devices.
Despite unveiling the BlackBerry Bold 9900 smartphone at the company’s annual BlackBerry World Conference in May, RIM has not launched a wholly new BlackBerry since the Torch debuted last August.
However, RIM co-chief executives Mike Lazaridis and Jim Balsillie told investors last week at the company’s annual general meeting that the second half of 2011 would be a busy one for the company, with RIM expected to launch seven new BlackBerry smartphones and several new versions of the PlayBook in the coming months.
RIM said the new BlackBerrys set to be launched later this year will run on the BlackBerry 7 operating system, while the long-anticipated QNX-powered BlackBerrys should be ready to launch in 2012.
At the International Consumer Electronics Show in January, RIM revealed it planned to launch a PlayBook in conjunction with the United States telecom company Sprint that would feature both WiFi and WiMax technology. At the time, RIM said the Sprint-WiMax PlayBook would be available “sometime this summer.” To date, the company has not provided a specific launch date for the device.
In February, RIM announced plans for two other PlayBook models – one capable of accessing wireless signals via LTE (long term evolution) technology, and a second with support for HSPA+ high speed wide area wireless networks — that would also launch “in the second half of 2011.”
Source: National Post