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    Friday, September 16, 2011

    Reuter site - RIM's market share slipping faster than expected

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    RIM's market share slipping faster than expected

    Fri, Sep 16 08:41 AM EDT

    (Reuters) - Research In Motion is losing market share much faster than expected to rivals Apple and Google, amid mounting concerns over its cash flow and ability to meet its outlook, analysts warned on Friday.

    Shares of RIM tumbled 22 percent in Frankfurt trading. In the United States, the BlackBerry maker's shares were down 20 percent in thin early pre-market trading.

    On Thursday, the company posted a sharp drop in quarterly profit, painted a dismal picture for the current quarter and said it now expects to reach only the lower end of an already reduced full-year outlook.

    "The North American market share losses persist and we believe this trend is starting to spread to international markets... with slow signs already in UK," Sanford C. Bernstein analyst Pierre Ferragu wrote in a note to clients.

    The weak performance showed how much BlackBerry -- once a byword for corporate communication -- has lost favor as Apple's iPhone and devices running Google's Android software take greater market share, especially in the United States.

    Yet, RIM's management remains in "blatant denial," said Bernstein's Ferragu, who believes the company's outlook for the third quarter and the full year appears "unrealistic."

    "The co-CEOs do not recognize the failure of the Playbook and continue to sell its merits in terms of security," he said, noting that PlayBook tablet computers shipments fell from 500,000 to 200,000 units in one quarter.

    Co-Chief Executive Mike Lazaridis, in a conference call after the results, said he was confident that RIM was on track to return to growth in the third quarter, while co-CEO Jim Balsillie promised a software upgrade he dubbed PlayBook 2.0.

    But National Bank Financial analyst Kris Thompson called the PlayBook "nothing short of a disaster" and said RIM now needs to spend money to promote the PlayBook in order to move inventory.

    Thompson was also concerned on the one-time smart phone leader's cash flow as it planned to raise its existing credit facility to $500 million from $100 million. RIM is set to burn $300 million this fiscal year, he estimated.

    He downgraded RIM to "underperform" from "sector perform."

    Separately, Citigroup analysts Jim Suva and Kevin Dennean said RIM's margins were under pressure as carriers shift their promotion spending to Android and Apple.

    "Promotion commotion hurts gross margins and we don't see it getting better," they said, and reiterated their "sell" rating on the stock.

    Brokerages Susquehanna, CIBC and Raymond James also cut their price targets on the stock.

    (Reporting by Tenzin Pema in Bangalore; Editing by Maju Samuel and Joyjeet Das)

    Reuter site - Apple settles with Queens stores over knockoffs

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    Apple settles with Queens stores over knockoffs

    Thu, Sep 15 17:05 PM EDT

    (Reuters) - Two stores in Queens, New York, accused of peddling unauthorized Apple Inc accessories have agreed to hand over all products in their inventories bearing the word "Apple" or any of the company's ubiquitous trademarks.

    The proposed settlement, lodged in Brooklyn federal court on Thursday, would resolve a trademark-infringement lawsuit filed last July against Apple Story Inc and Fun Zone Inc, two stores in the Chinatown section of Flushing, Queens, that sell cases, headsets and other accessories for Apple products such as the iPhone, iPad and iPod. The two stores maintain they have not violated any Apple trademarks.

    If U.S. District Judge Kiyo Matsumoto approves the settlement, the stores will have five days to turn over any counterfeit products in their inventories, as well as any products, labels, packaging, promotional materials and other items that bear any Apple trademarks, including the well-known image of an apple and proprietary phrases such as "iPod" and "iPad."

    According to a court filing from Apple, the design of the unauthorized iPhone and iPod cases sold by the two stores mimics the trademarked iPhone and iPod designs and includes the phrase: "Designed by Apple in California. Assembled in China."

    As part of the proposed settlement, Apple Story has agreed to change its name, which Apple contends is too similar to its "Apple Store" trademark. It has also agreed to remove an oversize iPhone-shaped window display.

    The defendants -- who include Apple Story owner Janice Po Chiang and Fun Zone manager Jimmy Kwok -- are also prohibited from destroying any records pertaining to the manufacture, distribution, sale or receipt of the cases or headsets identified as fakes by Apple.


    Apple filed the suit under seal on July 25. Under U.S. trademark counterfeiting law, a company may file a trademark infringement action under seal so as not to tip off the accused before seizure orders are executed. The record was unsealed following a request from Reuters.

    Apple said in court filings it sent private investigators to buy hundreds of dollars' worth of the alleged fakes from both stores multiple times over several weeks earlier this year.

    On July 27, Apple seized goods bearing the Apple trademarks from both stores. It has also won a court order requiring the defendants to turn over access to their business email accounts, which could yield clues about their suppliers, distributors or customers.

    The lawsuit comes as the California company tries to stem a tide of counterfeit products and even whole counterfeit Apple stores, in China.

    A spokesperson for Apple declined to comment on the settlement.

    Attorneys for both parties did not immediately return requests for comment.

    The case is Apple Inc. v. Apple Story Inc et al., in the U.S. District Court for the Eastern District of New York, no. 11-3550.

    For Apple: Mark Mutterperl and Todd Hambidge of Fulbright & Jaworski.

    For the defendants: Samuel Chuang of the Law Offices of Samuel Chuang.

    (Reporting by Jessica Dye in New York; editing by Andre Grenon)

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