Shares of Research In Motion Ltd. slipped in midday trading Tuesday after an analyst gave a cautious outlook about the impending competition the company’s BlackBerry device faces. In a research note, Credit Suisse First Boston analyst Michael Ounjian said he expects Research In Motion’s BlackBerry will see significant subscriber growth over the next three to five years, but warned its business model could be pressured as “increasingly attractive” alternatives become available.
Not only will new devices from Motorola Inc., Nokia Corp. and Palm Inc. challenge the BlackBerry for market share, their availability will also drive the adoption of competing e-mail platforms, the analyst added.
“We continue to expect improving devices to be launched by leading handset vendors in the next few months, including the Motorola Q, Nokia E-series and (Palm’s) Treo 700w,” Ounjian wrote. “As these devices begin to ramp, we continue to expect pressure on Research In Motion’s device pricing — or on subscriber growth — to become more apparent.”
Ounjian also said volatile trading of Research In Motion’s stock should persist while uncertainty surrounding the company’s patent dispute with NTP Inc. remains. A legal resolution — which Ounjian said would be positive for the company — is expected as soon as next month.
The analyst cut Research In Motion one notch to “underperform,” but held a target price of $60. Shares dropped $2.21, or 2.3 percent, to $71.65 on the Nasdaq.
Palm shares were up 78 cents, or 2.3 percent, to $34.69 on the Nasdaq, and Motorola was trading down 43 cents, at $24.10 on the New York Stock Exchange.
American depositary shares of Nokia, which earlier announced a settlement in a patent dispute with Japan’s Kyocera, were down 23 cents, to $19.27, while Kyocera shares gave up 24 cents, to $81.38. Both trade on the NYSE.