The stock of BlackBerry maker Research In Motion (RIM) closed at a new low of $ 41.72 on the Toronto Stock Exchange Monday after the wireless giant recalled about 1,000 PlayBook tablets because of a faulty operating system.
The last time RIM stock traded at these levels was in late 2006. On Nasdaq, the stock slipped to $42.61 – just shy of its two-year low of $42.53 in March 2009.
At its peak in June 2008, the stock traded at $150 on the Toronto bourse just before the global meltdown set in. The recall of PlayBook tablets comes just two weeks after the BlackBerry maker slashed its quarterly outlook over less than expected sales of high-end handsets.
Launched last month, the PlayBook – touted as a challenger to Apple’s iPad 2 – failed to create buzz in the market. Analysts say RIM is expected to sell about 500,000 tablets in the current quarter, and over two million in the entire year since its launch.
According to RIM, the recall involves only the 16-gigabyte models of the PlayBook. It said majority of the affected devices were still at retailers and hadn’t reached customers and involved problems in the initial setup of the device.
“In the small number of cases where a customer received a PlayBook that is unable to properly load software upon initial set-up, they can contact RIM for assistance,” a RIM statement said.
As investors abandon RIM stock and its current market value touches $22 billion, analysts Monday warned that the BlackBerry maker has to get its act together before launching the just unveiled two new, thinner smart phones with an updated operating system.
“We would like to see better execution, given these product delays and what was a less-than-stellar launch in terms of execution on the PlayBook,” Edward Jones technology analyst Bill Kreher told the Canadian Press Monday.
He said it was “absolutely critical” for RIM to put its upcoming BlackBerrys smart phones in market without any problems.
“In order to recapture mind share with consumers, the impetus is really on the company to deliver a compelling product,” he said.
But what will compound RIM’s problems is that the new smart phones are not likely to hit the market until next year.
RIM’s slipping sales and market value have given rise to speculation that Microsoft might buy the company which virtually invented the smart phone and then lost to Apple which was not even in the smart phone market till 2007.