RIM To Discontinue 16 GB Version Of PlayBook

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6/8/2012 2:25 PM ET

Struggling Canadian smartphone maker Research In Motion Ltd. (RIMM: Quote,RIM.TO: Quote) said Friday that it will stop making the 16 GB model of its BlackBerry PlayBook tablet, but will continue with the higher capacity models as it remains committed to the tablet computer market.

"RIM will no longer be making the 16 GB model of the BlackBerry PlayBook tablet. The 16 GB PlayBook will continue to be available for distributors and retailers while quantities last," the Waterloo, Canada-based company said in a statement.

RIM said it will continue to produce and sell the 32GB and 64GB models of the BlackBerry PlayBook. "There is more value for our customers in the higher capacity models (32GB, 64GB), and as such we have decided to focus our efforts here," the company noted. PlayBook received lukewarm response globally and was widely criticized at launch last year for lacking basic features such as email. The device has failed to wow consumers despite sharply discounted pricing and a major software upgrade amid stiff competition from Apple Inc.'s (AAPL) iPad and others.

In the three months to March 3, RIM shipped more than 500,000 BlackBerry PlayBook tablets. On the other hand, Apple sold 11.8 million iPads in the three months to March 31.

Late last month, RIM warned of a first quarter operating loss and revealed that it has hired J.P. Morgan Securities LLC and RBC Capital Markets to assist the company in reviewing business and financial performance. The company also said that there will be significant spending cuts and headcount reductions in some areas throughout the remainder of the fiscal year.

RIM has been subjected to takeover speculation over the past year. Chief executive Thorsten Heins, who took over the reigns in January, has not spoken about a possible sale of the company, but has not ruled that out either.

RIM shares are currently trading on the Nasdaq at $10.83, up 11 cents or 1.03%. On the TSX, the company's shares are currently trading at C$11.15, down 11 cents or 1.00%.