TORONTO (AP) -- Shares of Research In Motion are down more than four percent after a Goldman Sachs analyst downgraded the stock following what she says was a disappointing release of the new touchscreen BlackBerry in the U.S.
THE SPARK: Simona Jankowski said in a research note Monday that retail checks at over 20 store locations since March 22, including AT&T, Best Buy and Radio Shack, revealed a surprising lack of marketing support and poor positioning of the new Z10 touchscreen BlackBerry. She wrote that at most AT&T stores, there were no marketing materials or signs announcing the arrival of the Z10 and sales were poor.
The sell-off in RIM shares following the U.S. release follows a months-long rally. The company's stock had nearly tripled from a nine-year low in September after favorable reviews on blogs and financial analysts started to see the possibility of a comeback for the company. Jankowski now assigns a 20 percent probability of success for RIM's new BlackBerry 10 phones, down from 30 percent previously.
She lowered her 12-month target on the stock to $17 from $19.
THE BIG PICTURE: The BlackBerry, pioneered in 1999, has been the dominant smartphone for on-the-go business people and also crossed over to other consumers. But the iPhone's debut in 2007 showed that phones can handle much more than email and phone calls, and RIM's market dissipated.
The new BlackBerry Z10 has received favorable reviews since its release in February in Canada and elsewhere, but the launch in the critical U.S. market was delayed until late this month. A new keyboard BlackBerry won't be released in the U.S. for two or three more months. The delay in selling the new keypad BlackBerry, called the Q10, complicates RIM's efforts to hang on to customers tempted by the iPhone and a range of devices running Google Inc.'s Android operating system. Even as the BlackBerry has fallen behind rivals in recent years, many BlackBerry users have stayed loyal because they prefer a physical keyboard over the touchscreen on the iPhone and most Android devices.
RIM will report fourth quarter earnings Thursday morning. The results should provide a glimpse into how well the smartphones are selling in Canada, the U.K. and India, though details on the U.S. launch and other markets won't be part of the financial report until next earnings period.
SHARE ACTION: Down 68 cents, or 4.6 percent, to $14.23 in morning trading on the Nasdaq.