Research In Motion faces a tough battle to win back market share in the United States, Wall Street analysts said on Friday, a day after the BlackBerry maker gave a weak outlook.
The company’s U.S. shares tumbled 11 percent in pre-market trade, as the outlook underlined concerns that Apple’s iPhone and Android-based devices were rapidly eating into BlackBerry’s market share.
“With Apple and Android both on a roll in the United States, we believe RIM will be facing long odds to win back lost customers,” analysts at Baird said in a note to clients on Thursday, and cut the stock to “underperform” from “neutral.”
On Thursday, RIM said its earnings would slip as it spends heavily on the launch of its PlayBook tablet as it enters a fast-growing market created by Apple’s iPad. RIM also said its supply chain may get disrupted due to the earthquake in Japan.
RIM forecast full-year gross margins below 40 percent mainly due to lower PlayBook margins and falling average selling prices for its smartphones.
Goldman Sachs, which maintained a “sell” rating on the Canadian technology company, said it sees margins to suffer from the increasing tablet mix.
But most analysts are optimistic about the future prospects of the PlayBook, slated to come in April, and the new QNX-based smartphones that may hit the market in early 2012.
“Over the next two quarters, RIM’s outlook will be heavily dependent on the success of the PlayBook and … ramp in new product volumes in second half of fiscal 2012, which we believe will be challenging,” Susquehana analysts wrote in a note to clients.
The brokerage expects additional downward pressure on earnings from higher research and development and marketing expenses, and maintained a negative rating on the company.
RIM needs a competitive high-end consumer smartphone in North America to offset a decline in subscriber base, Susquehana analysts said.
The company’s Toronto-listed shares closed at C$62.49.