Stiff competition in SME market

The market for corporate mobile email is highly penetrated and saturated outside of small and medium enterprises (SMEs), and RIM is likely to suffer the most competition in the SME market, the analyst said.

While BlackBerry's traditional corporate selling points such as security and reliability are valued by larger accounts, these features appeal less to SMEs who are likely to keep an eye on costs, Ferragu added.

RIM's phones have a higher average selling price (ASP) than its rivals and as companies expand their user base, they will prefer lower-priced handsets and there is little RIM can do about it, he said.

"We now expect negative growth in corporate and an accelerated margin and ASP decline," he said.

Ferragu, who cut his price target on RIM's Toronto-listed shares to C$42.52 from C$58.46, said he does not believe the corporate segment provides a valuation floor for the BlackBerry maker anymore.

Shares of Research In Motion were down 5 per cent at $43.34 on Nasdaq. They touched a 16-month low of $43.09 earlier in the session.