Motorola Mobility Shares Down As iPad 2 Wows Analysts
March 03 2011 - 2:18PM
Dow Jones News
Shares of Motorola Mobility (MMI) slumped Thursday as Apple
Inc.'s (AAPL) new iPad won rave reviews.
Motorola Mobility shares were recently down 5.2% at $26.90.
Cowen and Company downgraded the stock to neutral from
outperform, a day after Apple took the wraps of the iPad 2. Apple
shares were up nearly 2%.
"Motorola Mobility's window of opportunity to establish Xoom
looks to be narrowing more rapidly than expected as Apple's iPad 2
launches in the U.S. next week at mostly sub-Xoom price points and
sporting a stronger than anticipated feature set," analyst Matthew
Hoffman said in a note.
Hoffman said he still expects Xoom, which launched recently, to
"find a home among hardcore proponents of the Android operating
system/ecosystem, given it is a solid first product for that key
developer community."
But he said the "arrival of a much thinner, still-cheaper" iPad
2 "leaves us less optimistic about the Xoom's near-term
prospects."
Analyst Tero Kuittinen of MKM Partners offered a different view,
arguing that Motorola is well-positioned in the expanding tablet
market with its dual-core chip and use of Honeycomb, the latest
version of Google Inc's (GOOG) popular Android operating
system.
Motorola Mobility, Kuittinen said, is also poised to become "the
vanguard of launching quad-core tablets and phones in the second
half of 2011."
"We believe Motorola has a chance to top four million units in
tablet sales in 2011 thanks to multiple form factors and expected
international traction," Kuittinen wrote.
-Benjamin Pimentel; 415-439-6400; AskNewswires@dowjones.com
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