Citigroup: Sell Palm, RIM and buy Motorola

An analyst at Citigroup is calling for the company to buy into Motorola as well as sell stocks in Palm and RIM (the makers of Blackberry devices).

Jim Suva says that the release of Motorola’s Droid on the Verizon network will end up spelling trouble for the other makers, even with Palm coming out with the Pixie in about two weeks. Even Research in Motion has a new device coming out, the Storm 2, but it just isn’t drumming up the kind of noise that the Droid is.

Something else no one should forget is that Motorola is releasing several Android handsets in the next few months. It is all pretty impressive when you think that people were talking about Motorola’s handset division going out of business.

The Citigroup analyst said yesterday that Motorola is a “buy” instead of a “hold” and that the Droid handset is “compelling.”

I am not sure what else he is looking at, but right now there are more HTC handsets on the market running Android than Motorola handsets.

After the analyst made his announcement, RIM and Palm both closed down for the day and Motorola closed up. Obviously this kind of analyst announcement has a large effect on the stocks for both of these companies.

I think Palm may be able to come back from losing, but the problem is (at least in my opinion from a consumer point of view) that the WebOS operating system was not ready for prime time when it was released and it has taken some time to get it ready.