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Research In Motion Shares Continue to Fall

by Brandon Russell | November 21, 2011November 21, 2011 1:40 pm PST

RIM HeadquartersThe new year can’t come soon enough for RIM. If the Waterloo-based company is to stay relevant in the long term, it will need to turn its fortunes around in a big way. I wonder what kind of new year’s resolution co-CEOs Mike Lazaridis and Jim Balsillie will make come January 1, 2012.

A new report coming out of Tech Trader Daily says that RIM’s shares are down $1.08, or 6%, at $17.11 as of Monday morning. The BlackBerry maker has fallen well below expectations this year, causing multiple analysts to slash estimates – chief among them is JMP Securities’s Alex Gauna, who downgraded RIM’s status from Market Perform to Underperform. Underperform is just another way of saying get your stuff together.

Of course, as has become the familiar story, Gauna writes that Research In Motion is feeling the pressure from both Apple and Google’s Android, particularly in price.

Low-priced smartphones are increasingly threatening to Research in Motion revenues and gross margins. The range of $130 and below smartphones has been steadily expanding and compares to RIM’s average device ASP of $287 in the August quarter.

Gauna isn’t the only one painting a grim picture of RIM. RBC Capital’s Mike Abramsky cut his price target from $29 to $23, cautioning that “impacts from recent service outages and PlayBook challenges (delayed software, sluggish sell-through)” will result in lower than anticipated Q3 revenue, $5.3 billion down from $5.4 billion.

And lastly, Kulbinder Garcha of Credit Suisse reiterated a report that RIM’s new QNX software is being delayed until mid-2012, with no respite in sight. Even worse, Garcha’s valuation of RIM reveals that a buyout is unlikely to happen because of “inherent concerns with the platform, a relatively weak intellectual property portfolio, and an enterprise value of $8.2 billion.”

Hey RIM, your days are clearly numbered. Stop dilly-dallying and pick your game up.

Does anyone even care about a QNX-based device anymore?

[TechTraderDaily]


Brandon Russell

Brandon Russell enjoys writing about technology and entertainment. When he's not watching Back to the Future, you can find him on a hike or watching...

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