Shares of Motorola Mobility slumped Thursday as Apple Inc.’s new iPad won rave reviews.
Motorola Mobility shares were recently down 5.2 percent, at $26.90.
Cowen and Co. downgraded the stock to neutral from outperform, a day after Apple took the wraps of the iPad 2. Apple shares were up nearly 2 percent.
“Motorola Mobility’s window of opportunity to establish Xoom looks to be narrowing more rapidly than expected as Apple’s iPad 2 launches in the U.S. next week at mostly sub-Xoom price points and sporting a stronger than anticipated feature set,” analyst Matthew Hoffman said in a note.
Hoffman said he still expects Xoom, which launched recently, to “find a home among hardcore proponents of the Android operating system/ecosystem, given it is a solid first product for that key developer community.”
But he said the “arrival of a much thinner, still-cheaper” iPad 2 “leaves us less optimistic about the Xoom’s near-term prospects.”
But analyst Tero Kuittinen of MKM Partners argued that Motorola is well-positioned in the expanding tablet market with its dual-core chip and use of Honeycomb, the latest version of Google Inc.’s popular Android operating system.
Motorola Mobility, Kuittinen said, is also poised to become “the vanguard of launching quad-core tablets and phones in the second half of 2011.”
“We believe Motorola has a chance to top 4 million units in tablet sales in 2011 thanks to multiple form factors and expected international traction,” Kuittinen wrote.
