NEW YORK ( Trefis ) -- Research In Motion ( RIMM) earns roughly 34% of its revenues from the U.S. but has seen its market share in U.S. smartphone sales decline over the past few years due to stiff competition from players like Apple ( AAPL) and Nokia ( NOK).

Not only has RIM lost smartphone market share, but its share of the total U.S. mobile phone market has also taken a hit despite the advantage of surging smartphone sales.

However, RIM has started to make up ground in international markets, softening downside to the $68.92 Trefis price estimate for RIM stock, which is about 10% more than the current market price.

RIM's Market Share Loss

According to Comscore, RIM's share of U.S. smartphone subscribers declined from 38% in August 2010 to 34% in November 2010, while its share of U.S. mobile phone subscribers declined from 9.0% to 8.8% during the same period. Losing share in the U.S. smartphone market at such a rapid pace is a worrying sign for RIM, particularly as consumers show an increasing appetite for phones based on Google's ( GOOG) Android OS. What is more disconcerting is RIM's inability to leverage the increasing smartphone penetration to gain ground in the overall U.S. mobile phone market.

We estimate that RIM's global mobile phone market share has increased from around 1% in 2007 to more than 3% in 2010, and we expect a further increase toward 7% by the end of our forecast period. However, declining fortunes in the U.S. market pose a threat to RIM's mobile phone market share and stock value. There could be a downside of 20% to our price estimate for RIM stock if its market share growth remains pressured in the years ahead and reaches 5% by the end of our forecast period (vs. our base estimate of 7%).

Market Share Gain

An encouraging sign for RIM is that it has started to gain momentum in international markets, decreasing its dependence on U.S. operations. During RIM's fiscal third quarter ended Nov. 27, BlackBerry was the number one smartphone in Western Europe and the U.K., and the No. 1 smartphone in Latin America for the third consecutive quarter.

The key difference between U.S. and international mobile phone markets is that most carriers subsidize hardware prices in the U.S., which is not the case in international markets (particularly emerging markets). This means that lower-priced smartphones like BlackBerry (around $300) are positioned for substantial upside in emerging markets, vs. higher-priced competitors like the iPhone (around $600).

The increasing global preference for smartphones should also benefit pure smartphone players like RIM. There could be an upside of 20% to our $68.92 price estimate for RIM stock if its global mobile phone market share can surpass 8% by the end of our forecast period (vs. our 7% base estimate).

To see the impact of various global mobile phone market share scenarios on RIM's stock value, drag the trend line in the modifiable chart above.

You can see the complete $68.92 Trefis Price estimate for RIM stock here.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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