Research in Motion Downgraded by Longtime Bull

Peter Misek, global technology strategist at Canaccord Adams, lowered his recommendation on BlackBerry maker Research In Motion Ltd. (RIMM) from “buy” to “hold” and is cutting his price target on the company from US$145 to US$110. The downgrade is a first in recent memory for Mr. Misek, who has long been one of RIM’s staunchest supporters on Bay Street. He had maintained a “buy” rating on RIM since September, 2005.

“This is still the best-managed technology company and still a great story, just not for the next six months or so,” he said in a research note. “It’s really being driven by what we think are some factors outside of RIM’s control, the biggest one being the [U.S.] economy.”

Mr. Misek says a perfect storm comprised of three factors will hurt RIM’s stock performance over the next six to nine months.

“First, the U.S. recession will lead to lower consumer spending and probably elongated device upgrade cycles for RIM as enterprises will take a wait-and-see approach,” he said.

More importantly, Mr. Misek says RIM’s much-anticipated 3G device will be delayed until the middle of the current calender year as a result of a number of production issues that have yet to be fixed.

Comments

[Tom B:]

Just change the ticker to "RIP". It's not the recession, but the iPhone that will kill off the Blackberry.

2008 Jan 11 10:13 AM

[citetez:]

APPL seems to be going down in sympathy with RIMM which is surprising. It is expected that the 3-G i Phone would be comming out in June 08 or so. The fact that RIMM will not beat them to the street with a 3-G divice seems to be good news for APPL --

2008 Jan 11 11:28 AM

[Tom B:]

"APPL seems to be going down in sympathy"

Jitters about the recession. Let's see what the real sales numbers look like. I'm guessing you need a laptop; you need a laptop.

2008 Jan 11 01:01 PM

[Proud Canadian:]

"The i phone that will kill off the blacberry"
Thomas, you should make your home works !
Here, in Canada, the major carriers like Rodgers, Telus and Bell are even not interested in AAPL. They are all doing business with RIMM !
So, if you wanna know, the formula for RIMM's target is: AAPL +$$$$$

2008 Jan 11 03:08 PM

[Tom B:]

"Here, in Canada, the major carriers like Rodgers, Telus and Bell are even not interested in AAPL. "

I have great respect for Canada (and NEW respect for the Canadian dollar. My EWC is doing great!). But, we in the States have a few small advantages over you guys, like the iPhone!'

Hopefully, we'll get Universal health care in '09, if we can get an adult in the White House!

2008 Jan 11 03:44 PM

[Proud Canadian:]

"But, we in the States have a few small advantages over you guys, like the iPhone!'"

I also have great respect for US. But how can you compare the iphone with the Blackberry ? It's completely different devices targetting different customers. And RIMM is already in CHINA !!! So what advantage do you see ??? Take my advice:do your homework and if you buy 1 AAPL, buy 2 RIMM !

2008 Jan 11 05:04 PM

[SmartGuySto...:]

How about all the finance layoffs that will lead to less demand for RIMM accounts and upgraded phones ... that is the biggest affect on RIMM in 1H 08.

2008 Jan 11 05:59 PM

[Proud Canadian:]

"How about all the finance layoffs that will lead to less demand for RIMM accounts and upgraded phones ... that is the biggest affect on RIMM in 1H 08."

That was the same fear in the last quarter and it did'nt happen. Those risks are upset by more than 100 countries and the management is presently focusing more in Europe.

2008 Jan 11 07:39 PM

[John Lazerow:]

The smartphone sector of the global mobile phone market is in a secular growth mode for the next few years. There will be plenty of business for both RIM and Apple to be successful as individuals have different tastes. To say one will be dead and one will win is arrogant and blind to the facts. Many folks will buy the iPhone for its merits and many people will buy the Blackberry for its merits. It's good to have choice.

The finance layoffs affect RIM much less than they used to as they have expanded their footprint to over 110 countries and 350 networks or so (adding 3 in the last week or so). There is also the consumer push that is helping them.

The stock performance for both in 2008 (AAPL down 18%, RIMM down 23%) is more reflective of the overall markets and not fundamentals of these companies which both continue to be strong. These stocks were spectacular in 2007 and it makes sense that they would come down given the macro issues out there. A buyer of Apple and RIM today will be happy in a few years.

2008 Jan 16 10:31 AM