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The Globe and Mail

Sprint drops plans to carry RIM’s 4G PlayBook

One of Research In Motion's major carrier partners has dropped plans to carry the new version of the BlackBerry PlayBook tablet, raising concerns there isn't enough preliminary interest in the product.

Sprint confirmed Friday it will not carry the cellular-equipped version of the PlayBook, due out this fall, on its high-speed network. Like other carriers, Sprint will continue to carry the Wi-Fi-only model currently in stores.

Sprint was quick to claim that the decision would have no effect on the relationship between the carrier and RIM , adding that it still carries more BlackBerry products than any other U.S. carrier.

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"This was a mutual decision between Sprint and RIM," Sprint spokeswoman Michelle Leff Mermelstein said in an e-mail to the Globe and Mail. "I would discourage you from speculating that it has to do with interest or sales."

RIM said in a statement Friday that it has decided to prioritize its 4G development resources on "Long-Term Evolution," a next-generation network technology.

"We remain excited and committed to delivering innovative and powerful 4G tablets to the U.S. market together with our carrier partners," the company said. "Testing of BlackBerry 4G PlayBook models is already underway and we plan to enter labs for network certifications in the U.S. and other international markets this fall."

The cancellation is especially embarrassing for RIM because Sprint was the company's hallmark partner for the upcoming 4G PlayBook. As early as January, at the Consumer Electronics Show in Las Vegas, RIM announced Sprint would be the carrier for the cellular-equipped version, which was due out in the summer but has since been delayed until the fall. The 4G model would include many of the features critics complained were lacking in the Wi-Fi-only model, such as built-in e-mail and calendar functions.

The 4G PlayBook was also supposed to solve one of RIM's biggest issues with the tablet – prior to the introduction of the cellular model, there was less incentive for carriers to stock and sell the PlayBook, because they couldn't make recurring revenue from the tablets in the form of data plans.

This year has been difficult for RIM, which has seen its stock price plummet as a result of product delays and profit warnings. Last month, the company announced plans to lay off 10 per cent of its work force. This month, RIM unveiled three new smart phone models it hopes will re-energize sales. A 4G PlayBook was also expected this fall; however, it is unclear whether Sprint's decision not to carry the tablet will further delay its launch.

Since the introduction of the iPad last year, and its follow-up this year, Apple has essentially dominated the tablet market, making it very difficult for competitors such as RIM to establish a foothold. Recent market share data suggests Apple's total control of the consumer tablet arena may be softening a little, but not as a result of increased PlayBook sales. According to a recent report by ABI Research, tablets powered by Google's Android operating system have snatched as much as 20 per cent of the market from Apple's devices in the last 12 months. Still, no individual Android tablet manufacturer comes close to threatening the iPad.

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RIM shipped approximately 500,000 PlayBook during its first fiscal quarter. During Apple's most recent fiscal quarter, the company sold 9.25 million iPads.

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