Here’s Why Wall Street Hates RIM

If Research in Motion (NASDAQ:RIMM) were a teenager, it would shut itself up in its room. The stream of severely negative predictions has not ebbed for the company as it gets ready to announce its fiscal fourth-quarter earnings after the close of markets on Thursday.

However, Sterne Agee analyst Shaw Wu said Tuesday that the company might actually beat expectations lowered after weeks of criticism, though he said the long-term scenario still looked grim.

BlueFin’s Paul Peterson said the company was likely to fall “well short” of the goal of having carriers sell 13 million units in the current quarter, which will then result in “setting up a weaker than expected outlook for the May quarter.”

RIM’s mobile market share has dropped to less than 5 percent in the U.S, according to Peterson, “dangerously low levels.”

Why are analysts predicting doomsday for the company?

Canaccord Genuity’s T. Michael Walkley summed up the problems thusly: “With strong share gains for the iPhone 4S, increasingly price-competitive Android smartphones, improving Windows smartphones, and strong initial sales trends for the new iPad, we anticipate increasing competition across all of RIM’s products.”

While the success of Apple’s (NASDAQ:AAPL) iPhone 4S and the expected release of the iPhone 5 later this year had put pressure on the rest of the market, Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) have upped their game. The new Google Android 4.0 Ice Cream Sandwich platform is set to launch this year, while Nokia and handset manufacturers are coming out with new devices for the Windows Phone 7. RIM, in turn, has been quickly losing carrier shelf space and promotion energy.

RIM’s BB7 devices are getting old, but with RIM postponing its own new release, the BB10, to the second half of the year, it doesn’t look like the company will be getting its footing any time soon.

RIM’s PlayBook tablet has also been struggling, but the company is being forced to continue production, as the QNX language on which the tablet is built will also serve as the basis for RIM’s future products, including BB10.

Shares have fallen almost 20 percent since new chief executive Thorsten Heins took over on January 22. Cowen’s Matthew Hoffman said he expected shares to underperform the rest of the market by 20 percent for the next 12 months.

To contact the reporter on this story: Aabha Rathee at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com