Bear Stearns Downgrades Research In Motion (RIMM)

The Consumer Electronics Stock Blog reports that in a recent client note "Bear Stearns analyst Andy Neff reduced his rating for Research In Motion (RIMM) from Peer Perform to Underperform. Neff noted that "this is a result of slowing growth rate, and saturation of the wireless email market." Key points from the research note were:

• While NTP litigation was an obvious dampening factor for demand over the past few qtrs, we’re lowering our net sub add forecast (6th consecutive time), highlighting decelerating growth rates. While potential for wireless email may be very large, the issue is what price of service/handset is required to rejuvenate growth.
• RIMM is planning to address these issues with new products targeting consumer/prosumer, including MP3 player, camera and other functionality, but: 1) It’s not clear that a corporate user-centric company can change its spots to target consumers (few can), and 2) This new approach could imply a lower-margin financial model.
• To RIMM’s defense, they did see a pickup in the weekly sub adds, but it’s not clear if that is sustainable. Competition doesn’t seem to be the problem (yet) — Good Technology is ~1/10th of RIMM and MSFT/NOK are just emerging — but carriers/competitors may use price to stimulate volume.

I'm sure IT managers will be happy to see consumer features added, such as MP3 player, camera, etc. It'll be good for worker productivity...not.