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RIM May Work Free From Its Rut: Analyst

A former Research In Motion bear says the tide may be turning for RIM.

Updated from 11:40 a.m. EDT

A former bear on

Research In Motion


has changed his tune as distress signals about the economy have quieted down.

JPMorgan analyst Ehud Gelblum upgraded RIM to neutral Tuesday after the company's day-long

Capital Markets event

Monday in Orlando.

Gelblum said it wasn't so much the copious amounts of BlackBerry Kool-Aid that swayed him as it was his sense that the crushing economic slump may be easing.

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A self-described macro bear, Gelblum put a

sell rating on RIM

in March, citing rising unemployment and the daunting challenges to BlackBerry sales in a tight-fisted consumer market, among other reasons.

Investors shrugged off his warning. RIM shares are up 74% since Gelblum affixed his sell rating on the stock. The belief that stability is now at hand has fueled the recent tech rally. The Nasdaq is up 11% so far this year.

But, as some tech analysts suggest, a

consumer-powered recovery won't last

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if unemployment keeps rising, personal savings rates increase and home prices dive.

But Gelblum says that downward cycle that once gave him pause may have been broken. Mutual fund and 401(k) statements look less dismal and mass layoffs may be slowing down, he said, adding that "people feel a little more secure these days."

If the rounds of big layoffs stop and people feel less threatened, they will probably start to loosen up on spending. That would in turn help boost corporate profits and reduce the need for more job cuts.

So it's possible, says Gelblum, "that the whole system can somehow pull itself up by the bootstraps and recharge itself automatically."

Other conditions seem to be helping RIM lately.

Two major changes emerged in the first quarter. According to RIM, phone companies said more than half of all the phones they are selling are smartphones. And second, the BlackBerry Curve outsold the popular


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iPhone for first place among smartphones last quarter.

And though the company made no mention of the two new BlackBerry devices -- the Tour (formerly Niagara) and Apex (Pearl Flip) -- that RIM watchers were expecting at Verizon. Verizon is expecting to start selling both phones this quarter, according to a source close to the company.

RIM will need the new BlackBerries and a next generation of its touchscreen Storm this year as new smartphones from Apple,





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hit the market.

RIM shares were up 0.8% to $74.86 in recent trading, while the Nasdaq was falling 0.69%.