Friday, March 4, 2011

Motorola Mobility's (MMI) Tablet Prospects Fading

Shares of Motorola Mobility (NYSE:MMI) closed down Thursday, as Cowen & Co.’s analyst Matthew Hoffman lowered his rating on the company, saying the introduction of iPad 2 (AAPL), which was more competitive than he anticipated, along with the release being sooner than originally believed, had Hoffman saying he sees the short-term prospects of MMI fading at this time.

Hoffman also made a major adjustment in the number of Xoom units he expects Motorola Mobility to sell in 2011, cutting estimates from 3.2 million units to 2.2 million unites. In the second quarter alone he sees as many as 620,000 fewer units of Xoom being shipped.

“The equation shifts more toward Apple — for now,” concluded Hoffman.

Over the long term he sees the $11 a share in cash MMI has allowing them to generate a “defendable long-term share position in tablets overall, and Android tablets specifically.” In the short-term he doesn't see that happening.

Hoffman lowered his rating on MMI from "Outperform" to "Neutral." Motorola closed Thursday at $26.78, dropping $1.60, or 5.64 percent.

No comments: