Deutsche Bank Securities cut the price target on Research in Motion and said the maker of BlackBerry wireless devices could see near-term pricing pressure as two competitors prepare to launch rival smartphones.
“We are lowering our price target on Research in Motion from $60 to $50 after our channel checks indicate that competitive push e-mail solutions and devices are coming on stream sooner than many expect, exposing RIM to pricing pressure in its core business,” wrote analyst Brian Modoff in a note to investors.
The research firm said that according to recent channel checks, the Motorola Q smartphone, often referred to as the RAZRberry, is expected to ship in time for the holiday shopping season, while the E61 from Nokia is expected in the first quarter of 2006.
“Our contacts indicate that these devices will likely be priced competitively, in the $200 to $300 range after subsidies,” said Modoff. “Given that RIM’s average selling prices are currently around $360, we believe the BlackBerry will face greater pricing pressure than the market currently expects.”
The research analyst maintained a “sell” rating on RIM stock and said “the competitive situation is getting cloudier.” Deutsche Bank trimmed the fourth-quarter and fiscal 2006 earnings-per-share forecasts by a penny to 73 cents and $2.49, respectively.