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streetwise

Richard Drew

Research In Motion Ltd. true believers, avert your eyes.

GMP Securities analyst Michael Urlocker is giving up on growth prospects for the stock, almost halving his target price and saying that in consumer, there's just not much hope of RIM competing with the cooler kids on the block, Apple Inc. and Google Inc.

RIM's Torch smartphone, the company's attempt to catch up with Apple and Google in the consumer space, is "too little too late."

GMP, which took RIM public once upon a time, now says the company's stock has little potential for gains, slashing the target for the stock to $48 (U.S.) from $85. Given that the stock is trading just shy of $48 now, Mr. Urlocker now rates the stock a hold rather than a buy.

"The recent launch of the BlackBerry Torch, a new operating system and new marketing campaigns seem to be doing little to reverse slower growth trends for BlackBerry," Mr. Urlocker wrote in a report Wednesday morning. "We have lower confidence in RIM's longer-term success because the company's pace of innovation and experience in consumer marketing and consumer applications appears inadequate relative to Apple and Google."

Mr. Urlocker and his team checked with 50 retail representatives at stores and found that the Torch isn't winning many new customers to RIM, with as much as 80 per cent of sales going to upgrading BlackBerry users.

All but one store reported that Torch sales trailed iPhone, and in some stores the iPhone's lead was 10 to one. The one store that sold more Torches did so because it had no iPhones. Ouch.

The upshot is that investors should "begin to look for exit opportunities," Mr. Urlocker said.

The one great hope might be a takeout, with Mr. Urlocker arguing that at current valuations of about $23-billion for the company, "RIM is attractively valued for strategic buyers."

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 6:55pm EDT.

SymbolName% changeLast
AAPL-Q
Apple Inc
+2.12%173.31
GOOG-Q
Alphabet Cl C
+0.16%151.94

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