BMO Capital Markets on Wednesday downgraded Research in Motion Ltd., saying the BlackBerry maker faces rising competition and a consumer shift toward cheaper phones.
Analyst Tim Long lowered his rating to "Market Perform" from "Outperform" and reduced his share price target to $64 from $100.
Long is concerned about RIM's reliance on Verizon Wireless, which he said accounts for about 30 percent of the company's revenue. He said RIM's new BlackBerry Storm 2 is an improvement over the previous model, but lacks some "compelling features that consumers are now looking for" and isn't getting the marketing push from Verizon that rival Motorola Corp. is for its new Droid phone.
Long added that carriers are "flocking" to lower-priced handsets, attracted by the fact that retailers can offer some for as low as $99 with a rebate. He said RIM stands a good chance of competing with cheaper devices, but the lower average sale price could hurt the company's profits.
He cut his earnings estimate for the company's full fiscal year.