Mobile Weekly Notes – Apple and RIM

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Apple ( AAPL ) continues to generate a lot of positive news, which resulted in its stock gaining around 7% in the last week. Speculation about the upcoming iPhone 5 specifications and the likely Sprint ( S ) iPhone deal got stronger during the week. Additionally, the news that raw material prices have improved is a big positive for Apple as it will help it to improve its profitability. Research in Motion's ( RIMM ) was volatile this week as a Comscore report indicated lost market share in the mobile phone OS market during the February to May 2011 period. However, RIM was one of the winners of the Nortel


Apple has reportedly placed orders for 15 million iPhone 5s to Pegatron and is set to start shipping them this September. Major news on the iPhone has always been a trigger for Apple's stock as the iPhone accounts for more than 50% of our $430 price estimate for Apple stock .

Additionally, an iPhone Sprint deal is going could be another catalyst for Apple's stock as Apple then gets access to around 45 million Spring subscribers. The report that mobile devices' raw material prices have improved is a big positive for Apple's profitability as before Apple had to sacrifice margins in order to maintain a constant supply of raw material for iPhone and iPad. The Japan tragedy played a major role in the supply of raw material.

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RIM continues to lose market share in the U.S. smartphone market with its share declining from around 29% in February to around 25% in May 2011. During this period, Apple overtook RIM for the first time, which was psychologically another negative blow. See our notes this week Comscore Jumps on the RIM Dog Pile and RIM Looks Oversold but Here's How to Justify it

However, RIM did win about $770 million worth of Nortel's wireless patents out of a total of $4.5 billion, which should boost its patent portfolio. Patents have started to play an important role in the smartphone industry, and is the major reason for so many lawsuits happening these days. See our note: Google Rivals Scoop up Nortel Patents in High Stakes IP Tussle

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets
Referenced Symbols: AAPL , GOOG , RIMM , S , YHOO

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