RIM shares tumble on renewed competitive concerns

Fri Jun 25, 2010 4:19pm EDT
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By Euan Rocha

TORONTO (Reuters) - Shares of Research in Motion closed down almost 11 percent on Friday, after the BlackBerry maker's quarterly results rekindled concerns about its declining North American market share and weaker profit margins.

Brokerages cut their price targets on RIM's shares and downgraded their ratings on the stock the morning after the company announced the results. The quarterly report included BlackBerry shipment figures that sparked renewed fears that the once iconic BlackBerry is losing ground to Apple Inc and other rivals.

Shares of the Waterloo, Ontario-based company closed down $6.35 at $52.23 on the New York Stock Exchange, even though the company had reported earnings that topped expectations and dangled more information about products in the pipeline.

While RIM promised to launch two high-end devices in the current quarter -- which are likely to boost shipments and lift its average selling price -- some analysts feared that it might be a case of too little, too late.

"Based on our store visit findings and product road maps, we expect further share gains from Android-based devices, as well as the iPhone," said Baird analyst William Power, who lowered his rating on RIM to 'Neutral' from 'Outperform.'

Power was referring to phones powered by Google's Android operating system and Apple Inc's iPhone.

In a note to clients, Power said the launch of new BlackBerry devices may help RIM in the second half of calendar 2010, but he thinks it might be too late for RIM to regain momentum in the United States.

RIM has steadily ceded market share in the United States since early 2009, as it faces stiff competition from the wildly popular iPhone and devices based on the Android platform.   Continued...

<p>A BlackBerry smartphone user is pictured checking its Calendar in Washington, March 30, 2010. REUTERS/Stelios Varias</p>