RIM seen facing increased market-share pressure

Fri Sep 25, 2009 2:45pm EDT
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By Wojtek Dabrowski

TORONTO (Reuters) - BlackBerry maker Research In Motion could see its share of the smartphone market eroded by competing devices like Apple's iPhone, analysts warned on Friday as RIM's stock plunged more than 16 percent in the wake of a disappointing profit and outlook report.

Analysts again wondered whether RIM would be able to hold its own as it fights an increasingly intense battle for retail and corporate subscribers, even as the economy seems to be stabilizing.

Such worries first surfaced ahead of the iPhone's launch in the summer of 2007, but RIM maintained it would be unshaken. It continued to post impressive subscriber gains and in late 2008 rolled out the touchscreen-based BlackBerry Storm, its answer to the iPhone.

Now, in wake of a profit and outlook report that fell short of expectations, analysts are again starting to doubt the Waterloo, Ontario-based company will be able to sustain its success.

"RIM is unlikely to maintain its over 50 percent share in North America in the face of increasing competition from Apple, Motorola, and Palm, among others," Goldman Sachs analyst Simona Jankowski wrote in a note to clients.

"Even in a still-benign competitive environment and with two newly launched products, RIM lost share for the second consecutive quarter," Jankowski added.

Goldman also cut its rating on the stock to "neutral" from "buy."

Part of RIM's strength in the smartphone market is its impressively sized distribution network. Retail consumers and corporate clients can buy the BlackBerry from more than 500 carriers and distribution partners in about 170 countries around the world.   Continued...

<p>Jim Balsillie, co-chief executive of Research In Motion (RIM), holds the new Blackberry Bold handset during its launch in Mumbai September 18, 2008. REUTERS/Punit Paranjpe</p>