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Analyst warns BlackBerry may suffer in price war

updated 11:50 am EDT, Fri March 13, 2009

Analyst on BBerry Risk

Analyst Mike Burton of ThinkEquity warned on Friday that Research in Motion is likely to suffer on the verge of a likely price war. Advising investors to sell their stock, Burton understands that carriers and competition are pushing even high-end phone makers like RIM, Apple and HTC to drop the prices on their phones and that RIM's BlackBerries are likely to struggle without significant price cuts. Although the Canadian phone maker already has budget models as well as premium devices, these weren't considered enough.

A likely need to trim costs within the company is only likely to exacerbate the issue, the researcher added.

"We think that even [RIM] with its multiple product cycles underway will have trouble growing in this environment," Burton said. "To combat this decreased spending environment we believe that [RIM] will be forced into making more price concessions."

RIM has nearly doubled its market share of smartphones in the past year but has been partly helped by selling especially low-cost smartphones like the Curve and Pearl Flip where Apple and HTC have often kept to selling higher-end devices that are less susceptible to pressure for price cuts.




by MacNN Staff

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