Motorola Sees Gains at RIM's Expense

Monday, 2 Nov 2009 | 1:25 PM ET

Motorola Corp. shares gained Monday and BlackBerry maker Research in Motion Ltd. declined after Citi Investments Research predicted that Motorola and others could break the BlackBerry's grip on the corporate cell phone market.

Motorola, Inc.
Motorola, Inc.

"The revolution of product and application service offerings is going to start to crack open the enterprise door and could pose a risk for BlackBerry," Citi analyst Jim Suva told investors in a note.

He cut RIM two notches to "Sell" from "Buy" and raised Motorola to "Buy" from "Hold."

Suva sees three trends that may allow Motorola to find openings: More companies are allowing workers to choose their own work phones. More phones allow companies to control rules and programs related to work while leaving non-work functions and information alone. And marketing hype is likely to shift away from BlackBerry as Verizon Wireless pushes Motorola's new Droid phone and other devices.

Verizon introduced the Droid last week and it goes on sale Friday for about $200. The new phone is part of a turnaround effort at Motorola that centers on smart phones powered by Google Inc.'s Android operating system.

The marketing attention focused on the Droid and other Android phones is also likely to hurt Palm Inc. , Suva said. The company is pinning its own turnaround hopes on its Palm Pre smart phone. Suva cut the company's rating to "Sell" from "Hold."

Motorola rose 40 cents, or 4.7 percent, to $8.97 in midday trading, while RIM fell $3.16, or 5.4 percent, to $55.57.

Palm shares were up 9 cents to $11.70.

  Price   Change %Change


Contact Technology


    Get the best of CNBC in your inbox

    › Learn More
  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.