TORONTO (Reuters) - BlackBerry maker Research In Motion Ltd will no longer produce the cheapest version of its poorly selling PlayBook tablet, but it said it remains committed to a tablet computer market it has struggled to break into.
RIM said it would phase out the 16 GB model of the PlayBook once stock currently with retailers is depleted. The company will continue to produce 32 and 64 GB versions of the device, which can hold more music, video and other content and which likely boast better margins.
RIM sold the 16 GB version for $199, while the 32 GB and 64 GB models are priced at $249 and $299.
The device is strategically important for RIM as it is the first product to use the QNX operating system RIM will move onto its future phones. RIM wants software developers to build PlayBook applications that could then populate an app store for the phones due later this year, but has had limited success.
The PlayBook was widely criticized at launch more than a year ago for lacking basic features such as email, and it has failed to wow consumers despite sharply discounted pricing and a major software upgrade.
"We continue to remain committed to the tablet space and the 32 GB and 64 GB models of the BlackBerry PlayBook continue to be available from our distributors and retailers around the world," RIM said.
RIM sold more than half a million PlayBooks in the three months to early March, while market-leader Apple Inc sold 11.8 million iPads in its quarter to late March.
Apple sells 16, 32 and 64 GB versions of the iPad.
(Reporting by Alastair Sharp; Editing by Janet Guttsman)