Research In Motion
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
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 ready.
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
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.
(Reporting by Alastair Sharp in Toronto and Renju Jose in Bangalore; Editing by Frank McGurty)