Editor's Note: This column first appeared in The Tech Edge , a proprietary newsletter, on Tuesday, June 24. For more information on The Tech Edge, click here .

Wall Street's fling with Nextel ( NXTL) will heat up this summer, but shrewd investors should brace for the moment when the winds change and the stock sails into rocky shoals.

By several accounts, Nextel is making solid progress on subscriber growth and is on track to post second-quarter results that will sate the bulls next month. Current expectations call for the company to report earnings of 24 cents a share on $2.5 billion in sales, a glowing endorsement of the company's industry-leading margins.

As testament to the Street's rapture, enthusiastic Nextel buyers have pushed the wireless phone service provider's stock up nearly 50% so far this year. That compares favorably to the 24% gain by Sprint PCS ( PCS) and the 38% increase of AT&T Wireless ( AWE).

But the second half of the year holds a couple of daunting challenges.

The most threatening development looks to be a direct attack on Nextel's niche, which, if successful, could not only slow subscriber growth, but rob it of customers outright.

The company has spent the better part of a decade improving its "Push-to-Talk" service, and recently announced it would offer the service nationwide. To date, there have been no significant challenges to the technology, supporting Nextel's claims that it is the only telco that can offer instant two-way radio communications. It has certainly been a good trick and the key to Nextel's success, but it also represents the company's technological Achilles' heel.

Starting as early as next month, Verizon ( VZ) will introduce new phones that imitate Nextel's beloved walkie-talkie features. Other rivals are also developing this service, which comes at a bad time for Nextel to lose its most differentiating feature, because starting Nov. 24, new number portability rules kick in that will allow customers to switch carriers yet keep their phone numbers.

As the smallest of the six national wireless companies saddled with a somewhat limited Motorola ( MOT)-specific network technology, Nextel had its fair share of naysayers. But ever since hitting a profit for the first time last fall, Nextel has proved its critics wrong. Many investors underestimated the power of "Push-to-Talk" and the must-have appeal the two-way radio has for in-the-field technicians, taxi drivers and teens.

Nextel has long been confident that no other service can replicate the quality of its walkie-talkie service, but suddenly it seems the company may have doubts. On Friday, Nextel announced that it will defend its legal claims to the name "Push-to-Talk." That same day, as it just so happened, Bloomberg reported that Verizon is expected to offer phones with walkie-talkie features in July. Add that to a gloomy industry backdrop of slowing wireless subscriber growth, weak business spending and an overall soft economy, and you are left with a fairly expensive stock.

Storms on the Horizon

Nextel's always been a strong, albeit niche player, but with its defining feature in the hands of competitors, the odds don't work well in its favor. Wireless telcos will be turning up the marketing volume as number portability kicks in, and consumers will have a whole new crop of color-screen, camera ready, Net-accessible phones, and the new ability to switch to better service providers without having to change phone numbers.

It's likely that customers will flock to the companies that offer the hottest phones, cheapest rates and best network coverage. People who stuck with Nextel because of "Push-to-Talk" despite higher prices, consistently poor-rated service and a thin selection of phones may have less of a reason to stay put. So while the stock should get nice and steamy in July and August, it's likely to cool ahead of a November chill.