Research In Motion Shares Jump on Upgrade

Shares of wireless-device maker Research In Motion(RIMM Quote) rallied almost 9% Friday, boosted by an upgrade and hints of new alliances.

SG Cowen raised its rating on the company to market perform from underperform following comments reportedly made by company executives at a German tech trade show, ceBIT. Executives reportedly told journalists that the company plans to announce new deals involving handset companies and carriers at next week's Cellular Telecommunications Industry Association trade show in New Orleans.

"We're always looking to work with device manufacturers and carriers," said a Research In Motion spokesman, adding, "we can't comment on anything definitively."

The company's shares were up 8.9% to $13.03 in late afternoon trading.

The anticipated deals are a part of the company's strategy to increase revenue through licensing agreements with potential competitors, in addition to selling devices and services. Last November, it inked a deal with Nokia(NOK Quote) to provide its email software on upcoming Nokia handsets. News of the Nokia deal sent shares soaring 26% to $16.57 on Nov. 8.

Separately, the company also said in December that Verizon Wireless will begin selling its services and devices early this year. The company currently sells its services to Deutsche Telekom(DT Quote)-owned T Mobile USA, Cingular and AT&T Wireless(AWE Quote) in the U.S.

Research In Motion is expected to tout its recently launched lower-priced Blackberry devices as well as a possible new high-end color-screen model next week. Its new 6200 series devices cost approximately $300, down from the average cost of its current generation of devices at $500. Lower prices are expected to encourage a larger audience of potential new customers.

To be sure, SG Cowen analysts said expanding costs related to a patent-infringement suit continue to be a concern for the stock.

But Friday and possibly through the beginning of next week's trade show, investors may be overlooking the potholes ahead. "RIMM must still show a path to profits," wrote SG Cowen analyst Robert Stone in a research note. "Litigation is an overhang."