VANCOUVER, Canada -- In media-convergence circles, all eyes are focused on the wireless industry. The market for mobile phones, personal digital assistants and laptop computers is continually blurring, and futurists are counting the days until the hand-held world's killer app arrives on store shelves.

It's a buzz that helped propel the stock of Waterloo, Ontario-based

Research in Motion

(RIMM)

to mind-boggling heights during the past year.

The producer of wireless hardware and software products, which reached a

Nasdaq

zenith of more than 175 during March, is now trading at about 25, much closer to its 52-week bottom of 11. Retail investors, mutual fund managers and large stakeholders, such as

Intel

(INTC) - Get Report

, still are licking their wounds from the fall.

Somewhere along the line, hype got ahead of reality and shareholders who've waited out the RIM roller-coaster ride aren't likely to see relief anytime soon. The company has a number of serious challenges on the horizon, not the least of which comes from

Motorola

(MOT)

, which recently introduced a two-way pager for the retail market. Their

Talkabout T900 Personal Interactive Communicator

, launched with considerable fanfare last week, is poised to grab attention, and possibly market share, from RIM's well-regarded

BlackBerry

wireless paging and e-mail device.

The news can't bode well for Research in Motion-invested mutual funds such as

(FDGRX) - Get Report

Fidelity Growth Company and

(PBHGX)

PBHG Growth . Thanks to stakes in RIM and another fallen Nasdaq angel,

Microstrategy

(MSTR) - Get Report

, the latter fund has taken a particularly acute bruising, and is down 13.36% so far this year. The widely held Fidelity fund, which counts Research in Motion among its top 10 holdings, is down 7.47% for the same time period.

Most of the damage to Research in Motion was done in the wake of the recent broad technology selloff and an April 11 announcement from the RIM camp warning that sales of its two-way pagers would flatten for the current quarter. The news was met with little sympathy from Wall Street, despite the firm's continually aggressive, innovative product lineup and an impressive array of distribution partners, which now includes

SkyTel

,

Motient

(SKYC)

,

Rogers AT&T Wireless

and other leading telecommunications companies.

"The company's channel partners have yet to get traction in the market, in part we believe because the partners are competing with RIM," wrote

Merrill Lynch

analyst Bill Crawford in an April 13 report, two days after the company announced predictable fourth-quarter earnings of $3.2 million compared with $2.9 million for the same period one year ago. "The issue with RIM is the lack of revenue visibility."

Crawford has a lukewarm accumulate recommendation on the stock. Merrill Lynch has managed RIM public offerings in the past. The sentiment is shared by other analysts, who believe that the dependence on the execution of channel partners presents an ongoing investment risk.

David Werezak, VP of marketing at RIM, believes the alliances are anything but a drawback. "We find our partnerships quite complementary, and are happy to provide technology and services to all of our network partners," he says.

Joining ranks with fellow tech developers and distributors may be crucial to RIM's growth, but it's also driving other players in the wireless space. Even the partnership announced between

Ericsson

(ERICY)

and

Microsoft

(MFST)

last December -- essentially to develop email integration between the mobile phone and the desktop computer -- rattled RIM shareholders. Both companies have better-established brands and channels of distribution.

And that may underscore Research in Motion's most daunting challenge: gaining better visibility in a field that's increasingly crowded with well-established tech titans. RIM's products are playing to great reviews, but uptake in the market hasn't been as pronounced as investors would like. To its credit, the company launched a widespread advertising and marketing effort earlier this month to tout the laurels of its Blackberry hand-held offering.

"The product has a very significant penetration once the product is adopted," says Ray Sharma, Toronto-based technology analyst with

Credit Suisse First Boston

, who maintains a buy rating on RIM. "If your most important needs are messaging and email, and secondly, PDA functionality, then the RIM product fits a very nice niche for the mobile professional." CSFB does not have an underwriting relationship with Research in Motion.

And then there's the more immediate competition from hand-held powers such as Palm

(PALM)

and Motorola. The latter company, with the higher-end

Timeport 930

pager already competing directly with the Blackberry device, admits its splashy

Talkabout T900

pager is geared toward a youthful consumer market. But as a scaled-down hand-held with an attractive price, Motorola's latest wireless device also could capture the murky yet lucrative middle ground between retail and corporate users.

"We think there will be some crossover into the business market, especially for folks who don't need all of the functionality," says Josephine Posti, public relations manager with Motorola. "I look at us as being in the same space (with RIM)."

With competition mounting directly and indirectly, Research in Motion will have to pull out all of the stops in order to significantly broaden its customer base. Quality counts, but quantity does, too. And finishing as an also-ran in the race to wireless dominance just won't cut it with increasingly finicky investors.