Shares of smartphone maker Research In Motion (RIMM) are getting a boost today, thanks mostly to an analyst upgrade of the stock. Shares are up 2.5% to about $71 as of midday in what has been a down market otherwise. Also helping out, though, is ongoing speculation that the home of the BlackBerry could be a takeover target.Behind the stock's rise: RBC Capital has raised its rating on RIMM shares from outperform to "top pick" and given the stock a price target of $120. In his report, RBC Capital analyst Mike Abramsky says "with a valuation of near 14x, near historical lows, below peers, reflecting largely downside scenarios, and with upside catalysts pending, we see positive risk/reward and rare opportunity to enter RIMM shares."

That's good news for the Waterloo, Ontario-based outfit, given that the market for smartphones is becoming fiercely competitive as new players, such as Apple (AAPL) with its iPhone and Google (GOOG) with its Android mobile operating system, enter the fray. Abramsky mentioned the possibility of strong quarterly earnings, healthy margins and the launch of a new browser -- all catalysts for the stock.

A Microsoft Takeover?

But RIM could also be getting some lift from speculation during this week that it could be a takeover target by Microsoft (MSFT) -- at least according to the blog, All Things Digital, which mentioned the possibility on Feb. 8. Such speculation would be nothing new: Microsoft CEO Steve Ballmer has in the past expressed interest in the company, and Microsoft's Windows Mobile operating system has lost significant market share to Google, Apple and others. So, such an acquisition could be attractive. RIM has the strongest foothold in corporations around the country of any smartphone company, thanks to the ubiquitous BlackBerry, and it has no long-term debt.

If a deal were be announced, it would probably happen during the Mobile World Congress, which begins on Feb. 15 in Barcelona, Spain. At that event Microsoft is widely expected to report that it has revamped its Windows Mobile operating system, which it will release later this year. The new software is expected to be more consumer-focused than earlier versions and based partly from Microsoft's Zune HD media player.

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