NEW YORK, (
has the mojo,
Research In Motion
less so, says Citi analyst Jim Suva in a research note Tuesday.
Android invasion underway, Suva recommends buying Motorola and selling RIM and Palm. RIM will be hit with slower growth and higher costs while Palm suffers from a lack of interest in its new Pre and Pixi phones.
As you have probably heard,
-- directly to consumers next year. This as Android gains some headway at
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made a big splash at telco partner Verizon this fall, the same shop where RIM books more than a quarter of its sales. The move puts RIM in a tough spot says Suva.
"Increasing competition on both the enterprise and consumer front is likely to force either higher spending and lower margins, or slower growth," Suva wrote in a note Tuesday.
Similarly, Palm has been finding the smartphone market a lot more crowded these days with the arrival of so many new Android phones. This is particularly painful for Palm as it hopes to take its phones to Verizon next month.
"That window is now closing and closing rapidly in our view as Droid demand and consumer awareness ramps," Suva writes. Verizon is likely to take "token amounts" of Palm phones, but offer little sales support for the line, Suva predicts.
Verizon's embrace of the new Android phones Motorola Droid and
Eris, along with continued support for BlackBerries, pushes Palm down on its list of priorities. As
, with some insiders seeing no need for the phones and certainly no need to give it a wholehearted marketing push.
Both Palm and RIM report earnings after the bell Thursday.
Motorola was unchanged while Palm was up 1.5% to $12.10 and RIM was down 1% to $62.66 in premarket trading Tuesday.
-- Reported by Scott Moritz