Motorola's rating lowered at UBS

Motorola Inc., the maker of the Droid smartphone, had its rating lowered by UBS AG analyst Maynard Um, who cited increasing competition from rivals such as Palm Inc.

Um cut his rating on Motorola to neutral from buy in a report today. The shares' rebound since January has made them less of a deal, particularly as Palm, which lowered its sales forecast yesterday, woos customers, he said.

Palm may reduce prices through Verizon Wireless, the largest U.S. mobile-phone company, Um said. That could potentially hurt Motorola, which has revamped its smartphone lineup to win customers back from Apple Inc. and Research In Motion Ltd.

Motorola fell 7 cents, or 1 percent, to $6.78 at 11:37 a.m. in New York Stock Exchange composite trading. Before today, the shares of the Schaumburg-based company had climbed 11 percent since Jan. 29, the day after Motorola reported its third consecutive year of declining sales.