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Adding one more to a series of setbacks for Research In Motion (RIMM), Sprint (S) announced that it would no longer move forward with plans to add the PlayBook to Sprint's product lineup. Sprint, in an apparent move to protect the relationship, decided Friday afternoon was a good time to announce the decision.

According to the Wall Street Journal, none of the largest U.S. wireless carriers have committed to selling the PlayBook. Meanwhile, Apple (AAPL) has sold well over 9 million iPads and continues to dominate the space. Hewlett-Packard (HPQ) recently dropped the price of its entry level tablet by $100, which would appear to have a squeezing effect on RIM's ability to maintain margin with the PlayBook.

RIM wrote a statement in response to the Sprint decision. In the statement, RIM announced that it would now focus its resources in the direction of LTE, which is used by Verizon (VZ), and shortly by AT&T (T). Unless RIM is able to bring a LTE 4G tablet to market sooner than expected, RIM is likely to miss the holiday shopping season. Any real impact on the top and bottom line is unlikely to happen before the first quarter of next year. I believe that is a long time for investors to wait and find out if RIM will now be able to execute its strategy.

RIM appears to be the classic value trap. The basic value metrics like PE ratio, and price/sales appear attractive in isolation, but when viewed over the course of several quarters it becomes clear RIM is falling behind.

In an article I wrote in June, I stated that RIM continues to be a short candidate. As key players distance themselves from RIM, critical mass can easily be lost, much like what happened with Palm less than two years ago. The Playbook was designed to be part of RIM's strategy in reviving its sales and market share loses. Today's announcement makes that goal increasingly difficult.

There is not much I like reviewing the charts, as all the major price moving averages are moving downward. The price continues to stair step its way into an abyss of misery for those who have maintained their faith in the management team. In June I called investing in RIM a "total train wreck" and the only thing that has changed in my opinion since then is the price has eroded further down.

While many would agree that at some point RIM will get bought out, the price is likely to follow the path of Palm, plus the value of the network. At some point RIM will be a buy, but it’s not here yet.

Source: Sprint Hangs Up on PlayBook 4G, Research In Motion Searches for Another Partner