Amid uncertainty over its market share and product roadmap, Research In Motion (NASDAQ:RIMM) took another hit Friday with the release of an analyst report criticizing the company's dual-CEO structure and its lackluster smartphone lineup.
The report, by UBS analysts Amitabh Passi and Phillip Huang, came days after investors had pushed RIM's stock to a five-year low following concerns that the weakness Nokia (NYSE:NOK) is seeing in its devices and services business could be a harbinger of things to come for the BlackBerry maker. The UBS analysts cut their price target on RIM from $60 to $45 and said that they were doing so because of several factors, including a "lack of visibility on earnings power, an uncompelling product refresh, uncertainty over timing of launches, enterprise base increasingly under attack from iOS and Android and business model inefficiencies."
A RIM spokeswoman did not immediately respond to a request for comment.
Additionally, the analysts also took a shot at RIM's management structure. Mike Lazaridis and Jim Balsillie have shared the role of CEO at the company since 1992. "We are also not convinced the current management structure -- co-Chairmen, who are also co-CEOs, and one of whom is now CMO, is the optimal one either," they wrote. Sameet Kanade, an analyst at Northern Securities, had suggested in April that RIM abandon the dual-CEO structure and put Laziridis in charge.
RIM has come under pressure for analysts and investors since it cut its earnings forecast for its fiscal first quarter in late April, and said that it expects revenue to be below the range it had previously forecast, and BlackBerry shipments to be closer to the low end of its forecast range. Adding to RIM's woes, Apple's (NASDAQ:AAPL) iOS is now the second largest U.S. smartphone operating system according to the latest research from comScore. As of April 2011, iOS accounts for 26 percent of all U.S. smartphones, behind Google's (NASDAQ:GOOG) Android at 36.4 percent. BlackBerry came in third at 25.7 percent, down 4.7 percent from January 2011.
RIM expects to shift its smartphones to software from QNX, which powers its PlayBook tablet, in early 2012. "All things being equal we would love to have these products earlier and not be having this call," Balsillie said in a conference call with investors when RIM made its announcement in late April. "Because it's such a big upgrade, it takes longer."
- see this Bloomberg article
- see this Financial Post article
- see this Barron's blog post
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