Highlighted stocks include Palm, Inc. (PALM) and Research In Motion Limited (RIMM).

Although Palm, Inc. (PALM) surprised us by posting better-than-expected results for 1Q 2009, the maturing lifecycle of Centro, the slow ramp of its Windows Mobile-based product sales, and product transition issues led to a disappointing 2Q 2009.

Though Palm is currently working on several cost-saving initiatives and expects to launch its next-generation phone in the first half of calendar year 2009, we have doubts on the success of it given the current economic uncertainty that has dampened demand for consumer products.

We continue to believe that Palm badly trails Research In Motion (RIMM) in the smartphone market and will not be able to effectively compete as an independent company. We have low confidence in its ability to survive with a weak market share, so we reiterate our Sell rating on Palm shares with a new 6-month price target of $5.00.

Anita Mohata contributed to this report.

Read the full analyst report on “PALM”
Read the full analyst report on “RIMM”
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