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Smart Phone Market to Grow ‘Very Rapidly’: Analysts

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Smart phone makers Research in Motion, Apple and Palm are all in great shape for more upside, said Mike Abramsky, managing director of RBC Capital Markets and David Garrity, principal of GVA Research LLC.

“[Smart phone market] shares are so small right now,” Abramsky told CNBC. “RIM's market share is less than 2 percent and Apple is only a little more than that. Both those players along with the Palm are very small compared to the incumbent companies such as Nokia .”

Abramsky said smart phone companies are in a position to benefit as existing wireless vendors find it hard to make new data smart phones that can compete with products from RIM , Apple and Palm .

The latest Apple iPhone hit stores todaywhile RIM on Thursday offered investors an outlook that fell short of some expectations, sending the BlackBerry maker's stock sliding even as the company reported a higher quarterly profit that topped forecasts.

Despite RIM's earnings, Abramsky said the company has an “unprecedented second-quarter lineup.”

“In the second-quarter guidance, as well as first-quarter results, the percentages of subscribers that are consumers are at an all-time high for RIM,” he said. “And that signals a very large opportunity that they’re positioned to capture and that’s probably why people look past some of the near-term shortfall on shipments.”

Garrity agreed, saying that investors’ concerns over RIM were “overblown.”

“I think RIM is the best house in a great neighborhood,” he said. “It has the broadest [subscribers] in terms of businesses and consumers, and in terms of the fact that smart phone are about 14 percent of the overall market—it’s a category that’s growing very rapidly.”

Disclosure:

Abramsky's firm, RBC Capital, has provided apple with non-investment banking securities-related & non-securities services in the past 12 months. RBC Capital has also provided Research in Motion with non-securities services in past 12 months. Abramsky also has investment banking clients who own shares of RIM.

Garrity's has family members who own shares of Apple.

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