Shares of Research In Motion extended a two-day slide on Wednesday on concerns that a profit warning from Finland's Nokia could presage more difficulties for the Canadian maker of the BlackBerry smartphone.
As with Nokia, RIM is losing market share as consumers line up to buy Apple's iPhone and devices based on Google's Android technology.
Nokia cited Android pressures in Europe at all price points. This is impacting RIM as well, said Avian Securities analyst Matthew Thornton.
Shares of RIM, which fell 4.4 percent on Tuesday, dropped a similar percentage to a fresh five-year low on the Toronto Stock Exchange on Wednesday, after Jefferies analyst Peter Misek wrote that the Nokia warning was a bearish signal for RIM.
RIM issued its own warning in late April, exacerbating fears raised a month earlier after revealing lackluster forecasts. RIM is due to release its earnings for the three months to late May on June 16.
The stock lost 16 percent of its value on April 29, the day after RIM warned it was not shipping as many devices in the United States and Latin America as it had expected.
We have reviewed RIM's margins and believe that the handset business could be much lower margin this quarter and going forward as average selling prices collapse, Misek said in a note to clients.
What is happening to Nokia could be a precursor to what could happen to RIM, said Misek, noting that both were embarking on difficult software transitions.
RIM's PlayBook tablet computer runs on its new QNX system that the company will begin using its smartphones next year. Nokia recently abandoned its Symbian software in favor of Microsoft software.
Speculation that Nokia is in talks to sell its core business to Microsoft for $19 billion may have added to nervousness about RIM. [ID:nLDE7500RE] The Finnish company denied as baseless a Boy Genius Report article that relied on unnamed sources.
Sterne Agee analyst Shaw Wu said that investors were also likely weighing the threat posed to RIM by Apple's announcement of its iCloud service, which will offer computing and data over the Internet and would pressure RIM's push network.
He said Apple's push services -- the ability to send information to a device without it being requested -- would become more seamless and powerful and RIM's advantage in that space would be narrowed if not eliminated.
RIM shares fell 4.5 percent at C$39.51 on Wednesday on the Toronto Stock Exchange. The company's shares also fell to a two-year low on the Nasdaq, down 5.4 percent at $40.53.
RIM played the third-biggest role of any single stock in leading the Toronto Stock Exchange's S&P/TSX composite index lower on Wednesday.
Investors also dumped Nokia shares on Wednesday, taking them to their lowest in more than 13 years after a profit warning a day earlier raised fears the handset maker may never regain its shrinking market share.
Nokia said on Tuesday mobile phone sales in the second quarter would be substantially below a previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.
(Reporting by Alastair Sharp and Euan Rocha; Editing by Frank McGurty)