No, RIM is not discontinuing the PlayBook — they are very much still supporting the year-old tablet. But they are ceasing production of the 16GB model, likely because due to recent markdowns they are losing money on the product.
An email received from RIM by a CrackBerry forum member makes it pretty explicit: “Moving forward, RIM will only be offering the 32GB and 64GB models of the BlackBerry PlayBook tablet. We continue to remain committed to the tablet space.” The move makes sense in the short-term; considering the $199 16GB model was seriously underpriced, RIM has to position the more expensive models — still significantly cheaper than the equivalent-sized iPad — as a premium product. Internal storage makes a great selling point (“32GB for less than the price of a 16GB iPad”) and it allows RIM to focus on media consumption on the 7-inch slate.
Retailers and internal RMA departments have sufficient supply of the 16GB tablet, but once that remaining inventory depletes, there will be no option but to upsell (or freely replace) to a 32GB model. This brings up an interesting argument: will the 4G and LTE versions of the upcoming PlayBook begin at 32GB? Will this mark the beginning of the end for low-storage tablets in the premium space? Android tablets like the Asus Transformer Prime come with 32GB standard, so there’s that argument.
Whatever the reason, it’s nice to know that RIM is still in it for the long haul, and is taking measures to cut costs without completely removing themselves from the tablet market. The 32GB and 64GB models are available for $249 and $299 respectively, still a bargain if you ask us.