RIM PlayBook future iffy; prices slashed $200 at Best Buy - ABC News

Research In Motion's PlayBook could be the latest casualty in the heated tablet computer war.

The PlayBook's price was slashed by $200 Thursday at Best Buy, and technology analysts speculated that the company could halt manufacture of the devices even as the Canadian company denied any such plans.

"We believe RIM has stopped production of its PlayBook and is actively considering exiting the tablet market," Collins Stewart tech analyst John Vinh said in a report. The chip analyst said manufacturer Quanta had laid off a "significant number" of workers from a factory that produces RIM's PlayBook.

RIM dismissed reports that its PlayBook was in danger of extinction as "pure fiction." RIM spokeswoman Jamie Ernst said, "RIM remains highly committed to the tablet market."

But NPD Group analyst Richard Shim, who closely watches the tablet market, said his firm sees a production gap as well. "Our supply chain research indicates they (RIM) don't have production plans for PlayBooks beyond this year."

The price of the 16-gigabyte PlayBook model, while still $499 on RIM's site, dropped to $299 at Best Buy. RIM says it had previously planned price cuts to boost retail sales but declined to comment on the specific $200 slash.

RIM's apparent PlayBook meltdown comes after Amazon on Wednesday blazed into the tablet market with the launch of Amazon Fire. The Fire's surprisingly low $199 price and tie-ins to Amazon's media and stores got a warm reception. Analysts expect Amazon to sell 2 million to 3 million over the December holiday season alone. Apple's iPad is forecast to take 73.4% of the market this year, according to researcher Gartner.

"From the start, RIM had a flawed product strategy for the PlayBook," said Forrester Research analyst Sarah Rotman Epps. "They had first-class hardware, but their software was not consumer-ready."

RIM's misses with its tablet come on the heels of Hewlett-Packard's decision last month to pull the plug on its TouchPad tablet.

RIM, maker of BlackBerry mobile devices, recently reported it shipped 200,000 Playbooks to retailers in its most recent quarter, compared with 500,000 in the previous quarter. "It might even be worse (for RIM)," Shim said. "You don't actually know how many they've sold."

Cutting prices, however, is a sure sign that RIM has PlayBooks sitting in stores that won't sell, Epps said.

RIM shares sank 74 cents to close at $21.16 Thursday.