It's Getting Crowded in PDAville - TheStreet

What a difference actually reading a company's press release can make.

Wireless stocks gave back some of Wednesday's tech-sectorwide rally gains on Thursday as expected, after the dust had settled from

Cisco's

(CSCO) - Get Report

upbeat quarterly earnings report Tuesday.

Especially hard-hit was

Research In Motion

(RIMM)

, manufacturers of the corporate geek-chic RIM wireless email device. Profit-taking on Thursday helped shave 11.64% off its share price to $16.17, completely wiping out Wednesday's gains and then some. RIM rode Wednesday's tech-sector rally to gains of 10.5%.

The company's drop and the far stronger showing of fellow device maker

Handspring

(HAND)

may have had less to do with the larger tech outlook and more to do with news about their relative competitive pictures.

RIM's rise earlier in the week was driven by investors' belated glee over a Monday announcement that the company had penetrated "mainland China" with a tacit promise of nearly 2 billion potential mobile-phone and handheld junkies. A closer observation of the company's announcement Thursday morning revealed that the company had inked a deal with all of

one

wireless service provider, Hong Kong's Hutchison Telecommunications. Under the deal, Hutchinson will begin selling RIM's latest model, the phone/email hybrid BlackBerry 5820, to be used in Hong Kong and Macau -- hardly the tech-starved teeming throngs of the mainland.

Moreover, this week's public unveiling of a new competitor further eroded RIM's chokehold on wireless email delivery, said U.S. Bancorp Piper Jaffray analyst Bill Crawford. Good Technology, a start-up based in Sunnyvale, Calif., plans to release a device similar in design and function to RIM's popular BlackBerry in the coming months. The start-up's device, the G100, also will be aimed at large corporations, RIM's target customers.

Good Technology plans to sell services for both RIM's myriad flavors of devices and the G100, which bears a striking resemblance to larger-form BlackBerries but includes a scroll wheel beneath the screen.

Already, Good has signed up clients, including

Thomson Financial

,

Electronic Arts

and

VeriSign

. "RIM has had the space to themselves," Crawford said. "The idea that they will have more competition may have investors a little less enthused." Crawford rates RIM market perform, and his firm has done banking for the device maker.

Handspring's Margin Madness

Trading places on the market seesaw is Handspring, whose shares crawled up 1.47% to $2.07, making it one of the few companies in the sector that gained despite the wireless sector selloff Thursday. Again investors joined a late celebration, this time of Handspring's Monday announcements that it would offer new consumers a $100 rebate if they traded in their old cell phones or PDAs and purchased the latest Treo communicator device directly off Handspring's

Web site. The move was largely viewed as an effort to clear out in-house inventory for the company's highly anticipated upcoming color-screen model, the Treo 270.

While it's fairly standard procedure to discount in anticipation of the latest, greatest product, Handspring's strategy is likely to hurt its already abysmal gross margins. For the latest fiscal third quarter ended March 30, Handspring reported gross margins of 9%, compared with 32% in the same period last year.

Handspring's rebate tactic made its rise Wednesday all the more puzzling. One clue might be the pan by

The Wall Street Journal

of Audiovox's new wireless handheld device, the Thera, while it praised the Treo. The Thera, to be introduced by

Verizon Wireless

(VZ) - Get Report

, is manufactured by Toshiba and is based on

Microsoft's

(MSFT) - Get Report

PocketPC 2002 operating system. Calling the Thera "big, boxy" and slow, the

Journal

at the same time praised Handspring's "beautifully designed" Treo communicator.

It all goes to show that while investors may be finicky, they may read closely after all.