Sector Snap: Handset stocks rise

RIM shares rose $3.17, or 2.7 percent, to $118.83 in afternoon trading.

In a client note, Lehman Brothers analyst Jeffrey Kvaal said the success of the company's integrated model has led to "significant barriers to entry" in the enterprise e-mail market and enabled the smart phone maker to snag the majority of the market.

"None of its competitors have a material presence in this market," he wrote.

The analyst rates the stock "Overweight" with a $165 price target.

Meanwhile, shares of handset maker Motorola Inc. rose 24 cents, or 3.4 percent, to $7.34.

In a client note, Morgan Keegan & Co. analyst Tavis McCourt said that while he had predicted second-quarter handset shipments of 28 million from Motorola, market checks and data indicate "downside is far more likely than upside."

"On the bright side, sell-through will likely exceed sell-in volumes for another quarter, which should give Motorola ample room for channel build once gaps in its handset portfolio are addressed (late 2008/early 2009)," he said.

American Depositary Shares of Nokia Corp., the world's leading handset maker, rose 19 cents to $24.76.

Elsewhere in the sector, shares of iPhone maker Apple Inc. rose $1.38 to $176.54.