Analysts cut RIM price targets as competition intensifies
Fri Jun 3, 2011 9:24am EDT
(Reuters) - At least two brokerages cut price targets on Research In Motion as they expect rival Apple's iCloud service and concerns over its inability to tackle competition from iPhone and Google's Android-based smartphones to hurt the BlackBerry maker.
Shares of the iconic Canadian company, which has long dominated the corporate smartphone market but whose hand has been weakened since Apple and Google launched an onslaught on the red-hot sector, have lost more than 38 percent in value since February.
UBS lowered its price target on the stock citing concerns over increasing competition and uncertainty over timings of RIM's product launches.
The brokerage, which cut its price target to $45 from $60, said it believed the current management structure of co-Chairmen, who are also co-chief executives, and one of whom is now chief marketing officer is not optimal.
Sterne Agee, which cut its price target on the stock to $44 from $52, said the launch of iCloud, Apple's online music and storage service, could result in some collateral damage as some aspects of the service are more attractive than RIM's own push network technology.
And if Apple decides to offer some base services for free, it could lead to revenue and gross-margin erosions for RIM, the brokerage said in a note to clients.
Shares of RIM which fell to a two-year low of $40.01 on Wednesday on Nasdaq, fell 48 cents to $39.95 in pre-market trade on Friday.
(Reporting by Siddharth Cavale in Bangalore; Editing by Gopakumar Warrier)
Credit: Reuters (www.reuters.com)
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