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Call of the Day: Noteworthy Tech Downgrade

Expectations of a Verizon iPhone are already starting to generate ripples across tech.

The first was generated by Citi which downgraded Motorola to ‘Hold’ from ‘Buy’ on fears of increasing competition in the smart phone market.

Citi analyst Jim Suva pointed out that cell phone makes including LG, Samsung and Sony Ericsson are all bringing out handsets based on the same Android operating system from Google Inc. that run Motorola's new phones.

On top of that, Apple Inc. is set to release a new iPhone model that will be able to run on the Verizon Wireless network, according to a report in The Wall Street Journal, expanding the phone's pool of potential buyers outside of AT&T Inc. subscribers for the first time.

Suva said that all of these factors could point to a disappointing start to 2011 after a strong second half of 2010, powered by the 20 Android phones that Motorola launched or plans to launch this year.

”We’d step to the sidelines on this one,” Suva tells Fast Money.

If you’re looking for a trade Joe Terranova thinks the increased competition benefits chip maker Qualcomm even with the recent run-up.

Hear our entire conversation with Suva. Watch the video now. You can find Suva about 3 minutes in.


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Trader disclosure: On Oct. 8, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (AA), (BAC), (GE), (GOOG), (INTC), (MON), (POT); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (BTU), (NUE); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (CVS); Finerman's Firm Owns (GENZ); Finerman Owns (GOOG); Finerman's Firm Owns (JPM), (JPM) Leap; Finerman Owns (JPM); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (POT) Calls; Terranova Owns (APA), (AAPL), (IBM), (OXY), (RSH), (UPL), (XBI), (JOYG), (C), (AXP), (SWN), (AGU), (EOG), (HES), (OIH), (ORCL), (SU), (VRTS), (FTO), (RIG), (PEP), (POT), (CRM), (CF); Terranova Owns (TBT) Calls; Terranova Owns (FFIV) Puts; Terranova Owns (FCX) Put Spread; Terranova Owns (JOYG) Put Spread; Terranova Owns (GLD) Puts

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Rich Ilczyszyn
* No Disclosures

GE Is The Parent Company Of CNBC

For Jim Suva
An employee of Citigroup Global Markets or its affiliates is a Chairman of the Supervisory Board of Motorola GmbH, subsidiary of Motorola Inc.
A member of the household of Tobias M Levkovich, Strategist, holds a long position in the securities of Motorola Inc.
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Research In Motion Ltd. This position reflects information available as of the prior business day.
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Amphenol Corp,
Corning Incorporated, Sensata Technologies Holding B.V..
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Corning Incorporated, Jabil Circuit Inc, Motorola Inc, Sensata Technologies Holding B.V.,
Tyco Electronics Ltd, Brightpoint Inc, Flextronics International Ltd.
Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Corning Incorporated, Sensata Technologies Holding B.V..
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Motorola Inc, AVX Corp, Amphenol Corp, Arrow Electronics Inc, Avnet Inc, Benchmark Electronics Inc, Celestica Inc, Corning Incorporated, Jabil Circuit Inc, Sensata Technologies Holding B.V., Tyco Electronics Ltd, Adtran Technology, Brightpoint Inc, Flextronics International Ltd, Molex Inc, Plexus Corp, Polycom Inc, Sanmina-SCI Corporation in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Amphenol Corp, Flextronics International Ltd, Jabil Circuit Inc, Motorola Inc, Sanmina-SCI Corporation, Tyco Electronics Ltd, Sensata Technologies Holding B.V., Corning Incorporated, Brightpoint Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Motorola Inc, AVX Corp, Amphenol Corp, Arrow Electronics Inc, Avnet Inc, Benchmark Electronics Inc, Celestica Inc, Corning Incorporated, Jabil Circuit Inc, Sensata Technologies Holding B.V., Tyco Electronics Ltd, Adtran Technology, Brightpoint Inc, Flextronics International Ltd, Molex Inc, Plexus Corp, Sanmina-SCI Corporation.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Motorola Inc, AVX Corp, Amphenol Corp, Arrow Electronics Inc, Avnet Inc, Benchmark Electronics Inc, Celestica Inc, Corning Incorporated, Jabil Circuit Inc, Sensata Technologies Holding B.V., Tyco Electronics Ltd, Adtran Technology, Brightpoint Inc, Flextronics International Ltd, Molex Inc, Plexus Corp, Polycom Inc, Sanmina-SCI Corporation.
Citigroup Global Markets Inc. or an affiliate received compensation in the past 12 months from Amphenol Corp, Flextronics International Ltd, Jabil Circuit Inc, Motorola Inc, Sanmina-SCI Corporation, Tyco Electronics Ltd, Sensata Technologies Holding B.V..
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.
The Firm is a market maker in the publicly traded equity securities of ARRIS Group, Inc., Adtran Technology, Brightpoint Inc, Flextronics International Ltd, Molex Inc, Plexus Corp, Polycom Inc, Research In Motion Ltd, SMART Modular Technologies Inc, Sanmina-SCI Corporation, Tellabs Inc.
Citigroup Global Markets Inc. and/or its affiliates has a significant financial interest in relation to Arrow Electronics Inc, Corning Incorporated, Jabil Circuit Inc, Motorola Inc, Tyco Electronics Ltd, Flextronics International Ltd.

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