RIM Ready for a Break-out? Or Sell-off?

CNBC.com

By any historical measure, Research in Motion has a pretty good, three-month stock run.

From a low of around $66 on July 13, they're just shy of $84 today.

Hardly a slouch.

But measure that against another major player in smart phones, Apple , which was at $142 on July 13, and was at $185 at the start of trading today. RIM has underperformed Intel , Google and Hewlett-Packard . The question is, why?

No good reason, really, except to say that the company has lost a degree of its buzz factor, especially among consumers. Apple has attracted the lion's share of headlines; Palm too has generated a fair amount of publicity, though not necessarily the good kind. And then there's RIM, which continues to plod along, quietly expanding its marketshare, quietly releasing new handsets, quietly holding onto its bread-and-butter enterprise customers. Not so quiet are the enormous price targets for these shares, not the least of which is RBC's $150 target on these shares, with analyst Mike Abramsky, who nailed Palm's earnings last week, expected a slight beat and raise report tonight after the bell.

Analysts anticipate $1 a share on $3.6 billion in revenue. The other key metrics to watch: 4.1 million new subscribers, and 8.7 million Blackberrys shipped.

Abramsky is slightly higher in all categories, and when it comes to guidance he's decidedly more optimistic than consensus: He expects $1.06 to $1.08 a share on about $4 billion in revenue with analyst consensus at $1.05 on $3.9 billion. He's also expecting 4.3 million new subscribers and 9.5 million to 9.8 million Blackberrys shipped.

His research suggests that Verizon and Sprint is seeing nice traction with the Blackberry Tour, and Blackberry appears to be fairly health at AT&T and T-Mobile .

But more importantly is what RBC's proprietary research found because of what it suggests for the overall smartphone sector: RBC IQ/ChangeWave survey data of 4,200 respondents shows smartphone sales momentum is accelerating, with 37 percent of respondents saying they own a smartphone, "an all-time high, up from 34 percent in June."

• Slideshow: Evolution of Wireless Communication

Part of the reason for RBC's high target on RIM, indeed the high target on RIM by many analysts right now, is precisely because of the acceleration of smartphone adoption. Billions of cell phones have been sold, but only a tiny percentage of them are so-called "smartphones," or net-enabled, highly capable devices like a Blackberry or iPhone. Most analysts agree that the potential in this sector is enormous, and will likely translate into several success stories, rather than one dominant player. With RIM and Apple momentum only gaining speed, amid hiccups by market leader Nokia , and a questionable future for Palm and its Pre, it seems some key players have plenty of room to run.

RIM shares have lagged the rest of tech if only because the emphasis lately has been on smartphones alone, and the stiff competition these companies face among each other. Apple's run can likely be attributed to its multiple revenue streams and the fact that its top and bottomlines are not solely dependent on iPhone the way RIM's balance sheet depends on Blackberry alone. I've written about that before, that Apple seems more attractive because of the revenue streams it enjoys from Macs, and iPods, and iTunes, and the App Store, and its operating system, etc. But lost in that message is just how fast the smartphone sector is growing and the enormous influence Research in Motion continues to wield in it.

RIM's had a nice run, but a strong report tonight and optimistic guidance, could be the catalyst investors have been waiting for to unlock this stock and its potential. And in potentially a very big way.

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