Citi: Motorola (MOT) Missed Christmas, RIM Rules

Hard to find two mobile phone companies as different as Motorola (MOT) and Research In Motion (RIMM). While the Ed Zander-free Motorola is still reeling in turnaround mode, RIM and its evolving BlackBerry lineup are riding the high-growth smartphone boom.

A Citigroup report distributed today sheds more light. Analyst Jim Suva says Motorola’s lame mobile phone lineup probably had a weak Christmas season. While Motorola continues to sell plenty of low-end Razrs, Suva says, there’s not much interest in its new, higher-end Razr2. Why not? At a subsidized $300, it’s more expensive than plenty of more powerful, more interesting phones, like the HTC Touch or the BlackBerry Pearl. Selling a Razr for $300 might have worked in 2004, but today, $100 more buys you an iPhone. Suva says Motorola will miss the Street consensus 42 million handsets sold by a million phones, and slashed his target stock price from $22.50 to $18.50. (MOT is trading around $15 today.)

Suva’s top pick? RIM. He thinks the smartphone market will grow 50% – 60% annually for the next few years, and that RIM’s BlackBerry gadgets are “best positioned” to capitalise on that growth. Why? Solid technology, good relationships with carriers and big corporate clients, infrastructure, and management. He expects RIM to deliver 61% revenue growth in calendar 2008 and 65% earnings-per-share growth. Suva’s price target on RIMM: $140, 33% more than its current $105 share price.

See Also: RIM’s Secret BlackBerry iPhone-Killer Revealed
How Palm Can Beat Apple’s iPhone: The Flash Phone
Smartphone Sales Soar, iPhone Grabs 27% Of Market

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