UPDATED 15:40 EDT / MAY 16 2011

RIM Recalls Defective Playbooks

Off to a quite inauspicious start, Research In Motion Ltd. (ticker symbol RIMM) 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. (AAPL)’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.

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.”

RIM’s stock price has been struggling mightily for quite some time, well below its 200 day moving average and down 26 percent so far this year, having plunged 14 percent on April 29 after RIM cut its profit forecast on slower-than-expected demand for BlackBerry smartphones. Today’s news of the tablet recall isn’t helping the stock price turn around.


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