Research In Motion Ltd's glitzy unveiling of the long-delayed line of BlackBerry smartphones on Wednesday and a new corporate name failed to impress Wall Street analysts, with at least three downgrading the company's stock.
RIM, which renamed itself BlackBerry, showcased two devices, Z10 and Q10, running on its new BB10 operating system as the smartphone pioneer looks for a fresh start.
"Despite recent enthusiasm for RIM's new BB10 devices, we see limited scope for traction in the hypercompetitive smartphone market," Credit Suisse analysts wrote in a note.
RIM faces an uphill struggle in terms of gaining smartphone market share, the Credit Suisse analysts said, downgrading the stock to "underperform" from "neutral".
RIM's Nasdaq-listed shares were set to open 3 percent lower on Thursday. They closed 12 percent down on Wednesday at $13.78. Its Toronto-listed shares also fell by the same margin to close at C$13.86.
RIM launched its first BlackBerry in 1999 and quickly cornered the market for secure emails, but its market share plummeted after customers jumped ship to Apple Inc's iPhone and devices using Google Inc's Android technology.
Analysts at Evercore Partners said they did not expect the new BB10 devices to cause a stir among customers, and cut their rating to "equal weight" from "underweight".
"The new hardware and operating system is a dramatic improvement versus RIMM's older products but expect a muted consumer response due to RIMM's damaged brand image," they said.
Barclays Capital analysts wrote in a note that RIM had the best possible device launch it could have hoped for, but there were many challenges ahead.
The analysts said average sales prices might be too high for many emerging market users and raised questions about how quickly businesses would adopt the new devices.
Analysts were also concerned about the delay in the launch of the devices in the United States. RIM said the devices would not be available in the country until March.
National Bank Financial analysts said the delay was very disappointing since the U.S. enterprise, government and consumer is the most important market for the Z10.
The Z10 touchscreen device will be the first of the two models to hit the market, with a rollout that starts in Britain on Thursday.
(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Sriraj Kalluvila)
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