Analyst: RIM Under ‘Sizeable Threat’ By iPhone, Android

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Once upon a time, BlackBerry-maker Research in Motion could count on its corporate customers as a stable source of revenue. Not so much now, as the iPhone and Android-based handsets invade the once safe inner sanctum of big business. That change is so drastic, one analyst warns that RIM is “under a sizeable threat.”

Bernstein Research analyst Pierre Farragu Tuesday cut his target price for RIM stock to $40, down from $55 and reduced his earnings per share expectations for 2011 and 2012. This after Farragu found 200 U.K. and U.S. companies held “a scary outlook” for RIM’s corporate customer base.

Corporate growth of mobile e-mail is likely to be limited to small and medium-sized enterprises, an area “in which RIMM is likely to suffer the most from competition,” he writes. What’s prompting such concern? Nearly three-quarters of companies using mobile e-mail are using RIM alternatives, such as the iPhone or Android.

“We expect these companies to progressively ramp up the installed base of non-Blackberry solutions and therefore expect increased pressure on RIM’s performance,” the analyst writes.

Unlike previous years, when IT departments embraced the Blackberry for being secure and looked warily at outsiders, such as Apple, today companies are being overwhelmed by employees wanting to use their consumer phone also at work. “The issue boils down to cost and consumer preferences: employees want to be able to use their own phone, and allowing them to do so presents IT and telecom managers with a way to substantially cu their operating costs,” the analyst said.

[Barron's]

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