RBC Capital Cuts Research In Motion To Sector Perform

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Shares of Research in Motion (RIMM.NAS) fell $1.20, or 1.4%, to $82.70 in premarket trade Thursday after RBC Capital Markets downgraded the maker of the BlackBerry wireless device to sector perform from outperform, citing increased headline risk from imminent competitive developments.

“We expect Microsoft to shortly announce an Enterprise ‘Feature Pack’ to Windows Mobile 5.0 targeting RIM’s functionality and market,” analyst Mike Abramsky told clients. Subsequently, he believes, Service Pack 2 for Exchange 2003 will be released after which Microsoft will possess a complete push-messaging offering.

He also expects other competitive handset and services launches over the next two quarters.

“We do not expect Microsoft and other competitors to erode RIM’s longer-term franchise. However, escalating news flow on these developments may amplify investor concerns about competition to RIM’s hardware and the sustainability of RIM’s recurring fee model,” Abramsky said.

The analyst maintained his $100 price target on the shares.