RIM shares decline as analysts see new threat.
Morgan Keegan's Tavis McCourt, who had had an "outperform" rating on RIM since September 2008, cut his rating to "market perform" and lowered his price target to $49 from $71.
Apple's iMessage service unveiled on Wednesday is "a major shot across the bow of RIM," Nashville, Tennessee-based McCourt said yesterday in a note. BlackBerry Messenger, or BBM as it's known, "has over 40 million users globally and is one of the keys to RIM's success outside the US," he said.
RIM fell $1.09, or 2.8 per cent, to $37.82 in Nasdaq Stock Market trading at 4pm New York time, the lowest since March 2009. Waterloo, Ontario-based RIM's shares have lost 35 per cent this year, while the Nasdaq 100 Stock Index gained 2.3 per cent. RIM is counting on sales growth in Latin America and East Asia, where lower-priced models such as the BlackBerry Curve with free, built-in BBM have gained popularity. Apple's iMessage function neutralizes BBM's strengths, McCourt said.
"Apple has knocked down all of RIM's advantages with iMessage," he said. While iMessage probably won't be released for a few months and is still untested by consumers, "given Apple's history, we suspect it would not be launching unless it had a competitive delivery time and overall performance."
The large base of customers with Apple devices and its youth brand loyalty will be a test to BBM's own popularity with teenagers, said RBC Capital Markets analyst Mike Abramsky. Apple didn't say how much customers will have to pay, if anything, to use iMessage. RIM's BBM costs users nothing as the messages are carried over its own server computers.
Muscat Press and Publishing House SAOC 2011
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