Bloomberg News

RIM Delays BlackBerry PlayBook Software Upgrade to February

October 26, 2011

(Updates with closing share price in seventh paragraph.)

Oct. 26 (Bloomberg) -- Research In Motion Ltd. said a software upgrade for the BlackBerry PlayBook that’s expected to include dedicated e-mail won’t come until February, missing holiday sales as RIM tries to revive demand for the tablet.

The PlayBook OS 2.0 upgrade won’t have BlackBerry Messenger, the free instant-messaging service that has fueled sales outside North America, the Waterloo, Ontario-based company said late yesterday in a blog. Messenger will be in a later upgrade, RIM said.

RIM is counting on the new QNX software that’s used for PlayBook and will power future BlackBerry phones to encourage programmers to build more applications for its devices. The company’s phones have lost market share to Apple Inc.’s iPhone and handsets based on Google Inc.’s Android software, which offer a wider range of apps. That drop led to investor demands for RIM to shake up its strategy and management.

“This represents another execution stumble given the company set expectations for an earlier delivery,” RBC Capital Markets analyst Mike Abramsky wrote in a note today. The Toronto-based analyst rates RIM shares “sector perform.”

Shortly after RIM put the PlayBook on sale in April, it promised dedicated e-mail would come in an update this summer. Co-Chief Executive Officer Mike Lazaridis said in September that the upgrade would be demonstrated at last week’s BlackBerry developer conference and released “thereafter,” causing speculation that it would arrive in time for the holiday shopping season to spur PlayBook sales.

Shipments Decline

The tablet’s shipments dropped by more than half last quarter following criticisms of its e-mail shortcomings and lack of apps. Deliveries to retailers such as Best Buy Co. fell to 200,000 from 500,000 in the previous quarter as Apple shipped 9.25 million of its market-leading iPad.

RIM fell 7 percent to $20.72 at 4 p.m. in New York. The shares have declined 64 percent this year.

Today’s announcement “sustains low investor sentiment regarding the company’s ability to deliver competitive software,” Abramsky said.

--Editors: John Lear, Cecile Daurat

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net


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