* NBF cuts RIM to "underperform" from "sector perform"
* Analysts see Q3 outlook as "unrealistic"
* RIM's management remains in "blatant denial" - Bernstein
Sept 16 Research In Motion RIM.TO RIMM.O is
losing market share much faster than expected, warned analysts
on Friday, a day after the BlackBerry maker gave a weak outlook
in further proof that the company was not gaining ground on
rivals Apple Inc (AAPL.O) and Google Inc (GOOG.O).
Shares of RIM (RIM.F) were down 22 percent in Frankfurt
On Thursday, the company posted a sharp drop in quarterly
profit and painted a dismal picture for its current quarter and
said it now expects to reach only the lower end of an already
reduced full-year outlook. [ID:nS1E78E1MR]
"The North American market share losses persist and we
believe this trend is starting to spread to international
markets, starting with slow signs already in UK," Sanford C.
Bernstein analyst Pierre Ferragu wrote in a note to clients.
The weak quarterly performance and bleak outlook posted by
the one-time smartphone leader showed how far BlackBerry, once a
byword for corporate communication, has fallen out of favor with
both consumers and investors as Apple's iPhone and devices
running Google's Android software take oversized bites out of
the booming market, especially in the United States.
Analysts at National Bank Financial believe the earnings
decline this quarter and in outlook signals more than just
declining hardware margins associated with the failing PlayBook,
and lower margins associated with handsets targeted at the
"Our view is the company is garnering lower profitability on
its service revenue, which is the monthly infrastructure fee
charged to carriers based on the number of active BlackBerry
subscribers," National Bank analysts said, as they downgraded
the stock to "underperform" from "sector perform."
And yet RIM's management remains in "blatant denial," said
Bernstein's Ferragu, who believes the company's outlook for the
third quarter and the full year appears "unrealistic."
"For instance, the co-CEOs do not recognise the failure of
the Playbook and continue to sell its merits in terms of
security," he said, noting that PlayBook tablet computers
shipments fell from 500,000 to 200,000 units in one quarter.
RIM's co-Chief Executive Mike Lazaridis, in a conference
call after the results, said he was confident that the company
was on track to return to growth in the third quarter and
beyond, while co-CEO Jim Balsillie promised a software upgrade
he dubbed PlayBook 2.0.
(Reporting by Tenzin Pema in Bangalore; Editing by Maju Samuel)
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