BlackBerry maker Research In Motion (RIM) dismissed a report on Thursday that it was pulling the plug on its PlayBook tablet computer.
Major US retailers, meanwhile, slashed the price of the PlayBook by up to $200. The move comes a day after Amazon unveiled a tablet rival with a $199 price tag.
RIM stressed its commitment to the PlayBook after Collins Stewart analyst John Vihn said the Canadian company has stopped production of the device.
"Any suggestion that the BlackBerry PlayBook is being discontinued is pure fiction," RIM said.
"RIM remains highly committed to the tablet market."
Sales of the PlayBook have been sluggish since the device went on sale in mid-April with a $499 price tag for the 16-gigabyte model, $599 for the 32GB version and $699 for the 64GB model.
Best Buy, Staples and Office Max were offering the PlayBook for $299, $399 and $499 on Thursday. Office Depot was selling the device for $100 off.
The PlayBook was still being offered for its original price at RIM's online store and through US carrier Sprint.
Amazon unveiled a tablet computer, the Kindle Fire, on Wednesday which costs $199, less than half the price of the market-leading iPad from Apple.
The cheapest iPad costs $499.
During its last quarterly earnings report RIM said it had shipped 200,000 PlayBooks in the quarter. Analysts had expected shipments of 700,000.
Apple sold 9.25 million iPads last quarter.
RIM shares have plunged recently as the Waterloo, Ontario-based company struggles to compete with Apple's iPhone and smartphones powered by Google's Android platform.
RIM shares, which have lost half of their value since the beginning of the year, shed 3.37 percent on Wall Street on Thursday to close at $21.16.
During an earnings call with analysts, RIM co-chief executive Mike Lazaridis said the past few quarters have been "challenging" but expressed confidence the company is "on track to return to growth in the third quarter and beyond."