RIM shares fall as smartphone market seen slowing

TORONTO (Reuters) - Shares of Research In Motion (RIM.TO) (RIMM.O) tumbled to a nearly two-month low on Monday, following a report that said the global smartphone market is being hurt by the slowing economy.

Research firm Gartner said on Monday that global smartphone sales growth fell by almost half in the second quarter compared with the first, as the slowing economy hurt the market.

RIM, the maker of the ubiquitous BlackBerry, emerged as the biggest winner in the second quarter, roughly doubling its market share from a year earlier to 17.4 percent.

But analysts said worries over a slowing market, coming weeks after computer bellwether Dell (DELL.O) said corporate spending on technology is slowing, hurt RIM's shares, taking them down 3.6 percent to C$109.10 on the Toronto Stock Exchange.

The stock had earlier fallen as low as C$104.50, while in New York, the stock tumbled 4.5 percent to $102.19.

Analyst Nick Agostino at Research Capital in Toronto said that while the slowing economy is a concern, there continues to be demand for cell phones in general, and in the short term, the smartphone market could benefit as customers make the switch to phones that offer more functions and applications.

"That is a positive in that even if we get a slowdown in the overall cell phone market, I think the shift toward the smartphones will continue to be there, just because people see the value-added attraction of the devices," Agostino said.

"Near term, I think the shift toward smartphones helps, but obviously, long term, that shift is not necessarily going to be immune to the economic environment," he added.

($1=$1.07 Canadian)

(Reporting by Leah Schnurr; Editing by Peter Galloway)