The bleeding just won’t stop for BlackBerry-maker RIM. A half-dozen Wall Street analysts are cutting the share’s target prices amid concern the Canadian company is in free-fall and Apple’s iMessage just cut the emergency parachute.
A large Canadian investment firm over the weekend called on the Waterloo, Ontario-based RIM to change leadership, separating the CEO and Chairman positions now co-held by Jim Balsillie and Mike Lazaridis. The move followed news RIM stock has fallen 37 percent since the start of the year. Then there is Wall Street, which seemed to pile-on with bad news, starting with iMessage.
It took just days for Wall Street to react to the unveiling of iMessage, a component of Apple’s upcoming iOS 5 that appeared to kick the slats out from under BlackBerry Messenger. Like BlackBerry Messenger does for RIM devices, iMessage provides a way for any iOS 5-powered device from Apple to freely and instantly communicate. Bad news for RIM, which jealously held onto the service as a way to attract users. The new service “will become one more reason for users to defect from Blackberry in 2012,” Wedge Partners analyst Brian Blair said.
Then came the big-name analysts from Morgan Stanley and Goldman Sachs questioning whether RIM products can live up to company promises. Goldman Sachs’ Simona Jankowski said RIM had “rapidly deteriorating business metrics” and cut her price target to $40, down from $50. This followed similar concerns by City, Oppenheimer, Merrill Lynch and others.
The problem for RIM goes beyond the threat of iMessage to RIM’s iPad rival, the PlayBook. Jankowski believes the tablet will sell just 2 million units in 2011, below Wall Street’s consensus of 2.6 million PlayBooks. The trouble is few corporate CIOs are interested in the PlayBook, few apps for the platform and lukewarm interest by carriers.
Then there is RIM’s core product, the BlackBerry. Along with the iPhone appearing closer in the rear-view mirror, there is a new threat: Microsoft. The Goldman Sachs’ analyst was “surprised by the extent to which Windows Phone is gaining momentum.”
All this comes as a backdrop to RIM’s annual meeting less than a month away on July 12. Expect a riot.
