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William Blair & Company Issues Research Report on Smartphones Industry and Initiates Coverage of Research In Motion Limited Wit

^{Published on 2008-12-10 11:23:56 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--William Blair & Company initiated research coverage of Research In Motion Limited (Nasdaq: RIMM) ($39.49) with a Market Perform rating and an Aggressive Growth company profile in conjunction with the issuance of an Industry Report titled "The Rise of Smartphones."

Analyst Anil Doradla said, "Over the past several years, Smartphones have not only been the fastest-growing segment in the wireless industry, but also have redefined the role of a mobile device. The growth profile of the industry has attracted a wide variety of participants, and with the entry of new players, roles are being redefined. Given this, we believe Smartphones should be viewed as an ecosystem that includes not only handset vendors and associated semiconductor vendors, but also Web companies, content vendors, and third-party applications vendors. Investors seeking secular growth stories in the wireless communications industry will likely find few attractive investment opportunities outside the Smartphone ecosystem. While many companies are expected to participate directly and indirectly in Smartphone growth, we believe a subset of the participants will be the key beneficiaries of these secular tailwinds."

Doradla estimated that Research In Motion Limited (RIM), a leading Smartphone vendor that has pioneered mobile e-mail with its iconic BlackBerry devices, would generate fiscal 2009 earnings per share of $3.39 and fiscal 2010 earnings per share of $3.99.

"We believe RIM benefits from having the right products at the right time (Smartphones expected to register a five-year CAGR of 21% between 2007 and 2012) and in the right place (42% market share in North America in the third quarter)," Doradla said. "While we like RIM's fundamental story and its reasonable valuation at current levels, and have a favorable outlook for the overall Smartphone industry, we are initiating coverage of RIM shares with a Market Perform rating predicated on 1) macroeconomic uncertainty, 2) increased competition on the consumer front, and 3) sustainability of RIM's gross margin."

Doradla also maintained his Outperform rating and Core Growth company profile for QUALCOMM Incorporated (Nasdaq: QCOM) ($31.90), the leading provider of wireless chipsets and intellectual property (IP) for CDMA-based mobile handsets and infrastructure.

William Blair & Company, L.L.C. is a global investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients.

William Blair & Company, L.L.C. intends to seek or expects to receive compensation for investment banking services from this company in the next 3 months.

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