RIM Recalls 1,000 PlayBooks Due to Operating-System Glitch
May 16, 2011, 4:40 PM EDTBy Hugo Miller
(Updates share price in last fourth paragraph.)
May 16 (Bloomberg) -- Research In Motion Ltd. said it is recalling about 1,000 BlackBerry PlayBook tablets because of a software glitch a month after the device went on sale, a setback for the company as it tries to win sales from Apple Inc.’s iPad.
The recalled tablets have a problem in the operating system that may make the software not load properly, the Waterloo, Ontario-based company said in an e-mailed statement. Most of the affected 16-gigabyte models are still with distributors, not in the hands of customers. RIM will replace affected devices and said customers with faulty software should contact the company.
RIM is banking on the PlayBook to lure users away from the market-leading iPad and boost sales as growth in demand for its BlackBerry smartphones slows. The PlayBook earned mixed reviews from technology columnists who suggested RIM rushed out the device and criticized its lack of a standalone e-mail program, network connectivity and shortage of consumer applications.
“Usually product recalls don’t make it into the headlines when it’s less than about 100,000 devices,” said Tero Kuittinen, an analyst at MKM Partners LLC in Stamford, Connecticut. “It shows that people are using a magnifying glass when looking at RIM.” He has a “buy” rating on the stock.
AT&T Inc. said on the day of the PlayBook’s April 19 debut it wouldn’t release software right away to customers that allows e-mail on the device because it had only just received the software and had to do further tests.
RIM fell 38 cents to $42.86 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has lost 26 percent this year and plunged 14 percent on April 29 after RIM cut its profit forecast on slower-than-expected demand for BlackBerry smartphones.
--Editors: Ville Heiskanen, Peter Elstrom
To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
