Analyst Downgrades RIM Stock on Poor BlackBerry Torch Sales

Research In Motion’s stock has traditionally been pretty strong, but Morgan Stanley analyst Ehud Gelblum has lowered the target price to $47, and downgraded the stock to “sell”. As Henry Blodget says, “when analysts cut stocks to SELL, they burn relationships with not only the company but clients who own the company’s stock. So when they finally give up and throw in the towel, you know things really have gone to hell.” Whyfore the downgrade, then? Of course the BlackBerry Torch 9800 hasn’t been selling so hot, but there are a few other reasons.

  • The “ongoing chorus” of countries threatening to shut down BlackBerry service.
  • The “drumbeat” of enterprises exploring the “bring your own phone” approach for corporate e-mail, which opens the door to employees using iPhones and other non-RIMM devices.
  • The recent success of Android.

Gelblum forecasts that BlackBerry market share will fall to 13.1% in calendar 2012 and that “the longer-term headwinds have just become too numerous for the stock to work in the near or mid term.”

Personally, I wouldn’t worry too much about the BlackBerry bans, since they’re getting handled pretty nicely, and BYOP (bring your own phone) in enterprise is still the exception rather than the rule. However, the threat of Android capturing a consumer market that BlackBerry was just starting to get cozy with is very real. The biggest challenge to RIM right now is to get developers interested in writing BlackBerry apps, since the current selection can’t hold a candle to iPhone or Android alternatives. By comparison, the BlackBerry development environment is just not a fun place to be for programmers.  If I owned RIM stock, I’d wait for the BlackBerry Developer Conference next month to see if new tools are introduced which could produce a richer App World, then decide if I wanted to cash out.

[via Barrons]
  • James

    I bought a new Blackberry Torch this week, which is my first blackberry. And I will be picking up a second one for my 22 year old daughter this weekend. This phone has been flawless so far for my 1st week of usage.

Back to top ▴