* RIM recalls 1,000 PlayBook tablets on flawed OS
* Shares near lowest since March 2009
(Adds share move, RIM statement, analyst quote)
TORONTO, May 16 Research In Motion
RIM.TORIMM.O shares neared a two-year low on Monday after
the BlackBerry maker said it had recalled about 1,000 of its
Playbook tablet computers due to an operating system flaw.
The Canadian company has been dogged by troubles in recent
months, disappointing investors by slashing sales and earnings
forecasts soon after revealing a weak earnings outlook.
RIM said the batch of 16 GB devices were shipped with "an
OS build that may result in the devices being unable to
properly load software upon initial set-up."
The PlayBook runs a QNX platform RIM bought last year and
plans to migrate into its new smartphones starting in 2012.
"It probably doesn't move the needle financially but it's
just another blemish from an execution standpoint," Avian
Securities analyst Matthew Thornton said of the recall.
Most of the affected devices were still in distribution and
had not reached customers, RIM said in an emailed statement.
The faulty batch was sent to office supply chain Staples
Inc (SPLS.O), technology blog Engadget reported on Saturday.
Staples did not respond to requests for comment.
RIM's Nasdaq-listed shares fell as low as $42.61, just 9
cents above an August 2010 trough. A fall below $42.52 would be
the lowest price since March 2009 and give the company a market
capitalization of $22.2 billion.
The shares have lost a quarter of their value this year.
RIM hoped the launch of the long-awaited PlayBook tablet
could revive its fortunes, but the product garnered poor
reviews and complaints it had been rushed out before it was
Its aging BlackBerry smartphone lineup has steadily lost
market share, especially in the hyper-competitive U.S. market,
to snazzier devices such as Apple's (AAPL.O) iPhone and a slew
of devices running Google's (GOOG.O) Android software.
RIM is expected to ship some 3 million PlayBooks this year,
far fewer than the 15 million iPads rival Apple shipped in a
similar period last year to single-handedly create a market for
touchscreen devices halfway between a smartphone and a laptop.
In April, RIM cut its first-quarter earnings outlook citing
fewer smartphone shipments, particularly in the United States
and Latin America, formerly a strong growth market for RIM as
it expanded globally. [ID:nN28282063]
(Reporting by Alastair Sharp in Toronto and Renju Jose in
Bangalore; Editing by Frank McGurty)