Jefferies Comments on Q112 QNX Launch by RIM (RIMM): Rushed Job Could Be Harmful

August 9, 2011 12:13 PM EDT
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Jefferies comments on Research In Motion's (Nasdaq: RIMM) upcoming QNX-equipped smartphone. The firm maintains an Underperform rating and $22 price target on the shares.

RIM's QNX phone is expected to launch sometime in the first-quarter of 2012, according to Jefferies. Though RIM has dubbed the device a "superphone," Jefferies notes, "we also believe it will be a single-core, non-native email, non-push, non-data compressed Blackberry...we find these specs uncompelling...we see this as nothing more than ditching features, functionality, and performance in an attempt to adhere to a Q1 launch commitment to carriers and partners." Jefferies is looking for the second-half of 2012 for native email, dual-core QNX phones.

Further, Jefferies says, "we would become incrementally more bearish if RIM were to launch an underpowered and non-BES/BIS-linked Blackberry powered by QNX. We believe it would harm consumer perceptions and would likely encourage enterprises to seriously evaluate alternative solutions...[one prominent blog] reports that enterprises will have to use Microsoft's ActiveSync to support Microsoft (Nasdaq: MSFT) Exchange email on the QNX phone. We believe this could lead to a permanent shift away from Blackberry services and devices."

RIM shares are about 6.2 percent better on Tuesday's session.

Click here for more analyst color on RIM, or here for a ratings history.

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