updated 12:15 pm EST, Mon November 2, 2009
Citi urges selling Palm, RIM stock
Citigroup analyst Jim Suva today signaled a major rethink of its approach to cellphone shares by downgrading both Palm and Research in Motion stock to a "sell" recommendation. The about-face comes as a direct result of the Motorola Droid and a belief that the Android phone is a dark horse which will upset phones like the BlackBerry range or the Pre by upstaging them both at work and through sheer publicity.
"Motorola is launching of one of the most compelling offerings at [a] time when many investors have given up on the company's handsets," Suva says, adding that it should "crack open the enterprise door" and create a "promotion commotion."
The phone as an Android 2.0 device is more directly suited to work with built-in Microsoft Exchange support and should be receiving one of the largest ad campaigns in Verizon's recent history, including a Times Square billboard. Rumors have circulated that Verizon deliberately snubbed the BlackBerry Storm2 by announcing the Droid the same day as the Storm2 shipped, guaranteeing that RIM's phone would be downplayed for the rest of the year.
Apple's valuation is untouched at Citigroup, indicating the firm doesn't believe iPhone sales will be significantly affected by the Droid's appearance.