updated 01:45 pm EDT, Fri September 25, 2009
RIM stock drops 19 percent
Research in Motion's stock fell a sharp 19 percent on Friday in a reaction to the company's mixed performance in its latest quarter. Investors were upset with both the steep quarter-to-quarter drop in net profit as well as a relatively conservative outlook that saw its own estimates only slightly above what it managed during the summer. Analysts had been expecting much higher numbers with the usual fall sales spike and new BlackBerries known to be in the pipeline.
Concerns about RIM's response to the iPhone also factored heavily into the researchers' recommendations. Goldman Sachs was the most influential as downgraded its value of the company to "neutral" and expected RIM to lose its over 50 percent of the US smartphone market to inroads from Apple and, to a lesser degree, Motorola's Android phones as well as Palm webOS devices like the Pre and Pixi. Analyst Simona Jankowski explained that even the record-high 8.3 million BlackBerries shipped wasn't enough to stop RIM from losing market share, especially as it had launched phones like the Tour and Curve 8520.
"Even in a still-benign competitive environment and with two newly launched products, RIM lost share for the second consecutive quarter," the researcher said.
UBS' Phillip Huang echoed the sentiment with worries that increased competition could hurt RIM, especially if Apple strikes a deal with Verizon for any handsets. Deutsche Bank has followed suit and moved from a "hold" rating to "sell" based on its own concerns.
Two phones are rumored to ship in the fall from RIM and should involve the 9550, a sequel to the Storm that adds a better touchscreen and Wi-Fi, as well as the 9700, a sequel to the Bold with a slimmer design, an optical trackpad and other minor updates.