advertisement UPDATE 1-RIM falls on competition fears after Symbian deal (Adds analyst comments, closing stock price. In U.S. dollars, unless noted) By Jeffrey Hodgson TORONTO, March 22 (Reuters) - Shares of Research In Motion Ltd. (RIM.TO: Quote, Profile, Research) fell almost 6 percent on Tuesday on fears of greater competition for the maker of the BlackBerry wireless e-mail device after mobile phone software maker Symbian struck a licensing deal with Microsoft Corp. (MSFT.O: Quote, Profile, Research) . Shares of RIM, which helped popularize mobile e-mailing with its thumb-operated BlackBerry, fell $4.79 to $77.35 on Nasdaq on a volume of more than 11.6 million shares. In Toronto, RIM fell C$5.61 to C$93.69. "That's my sense of it: (fears of) increased competition from Microsoft and Nokia and Symbian," said Martin Cecchetto, an analyst at UBS Securities, who added that he thought investors were "reading too much into it". Britain's Symbian said on Tuesday it agreed to license synchronization software from long-time rival Microsoft in an effort to win more corporate customers. As a result, users of "smartphones" that run on Symbian software, over 20 million devices, will be able to receive e-mails via network computers that run Microsoft's Exchange Server software. These servers are used mainly for Microsoft's Outlook e-mail and calendar applications. Nokia (NOK1V.HE: Quote, Profile, Research) , which sells most of the Symbian-based smartphones, last month signed a deal to license the same software. Merrill Lynch analyst Pat Chiefalo said in a note to clients he does not think the Symbian-Microsoft deal represents a "materially more competitive threat" to RIM's BlackBerry and e-mail service. "Microsoft has found little success in the enterprise market for its e-mail solution. We do not believe that broad handset availability has been the limiting factor to this success; rather, the security and functionality offered by Microsoft has come up short," he said. "As a result, we do not believe greater distribution through Symbian's operating system will drive greater adoption of Microsoft's Mobile solution." Chiefalo reiterated his "buy" rating on RIM stock with a $107 price target. Waterloo, Ontario-based RIM is currently the market leader in providing mobile e-mail and calendar service for companies and other large organizations. But the stock has taken periodic hits in recent months on fears of competing offerings from much larger players like Microsoft and Nokia. Separately, Stanford Group analyst Pablo Perez-Fernandez issued a research note on Tuesday that warned closely held wireless e-mail firm Good Technology is eroding RIM's technical lead in the mobile data sector. But he maintained his "buy" rating and $85 share price on the stock. RIM shares have rallied from a year-to-date low of $60.28 on Nasdaq hit March 11, boosted by the $450 million settlement this month of its three-year patent dispute with NTP Inc. ($1=$1.21 Canadian)
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Mobile phone operating software maker Symbian is licensing the Microsoft ActiveSync technology in a move that surprised analysts. The license would allow Symbian to develop a plug-in for mobile phones to let users check email that is served by Microsoft Exchange Server mail system.

Symbian was formed in 1998 by Ericsson, Nokia, Motorola and Psion in a collaborative desire to counter Microsoft's emerging market power in operating systems for handheld devices. While Microsoft now provides the Windows Mobile software for mobile phones, it has not attained significant market penetration. At the same time, in part through the increased popularity of Research in Motion's ''BlackBerry'' mobile email device, users have come to expect their mobile phones to synchronize email with various mail servers — including Exchange Server.

Symbian appears to be sensitive to the appearance of collaborating with the very competitor that spurred their creation. Symbian's press release emphasized that the licensing of the technology introduces just one of the many methods the Symbian software communicates with email servers. The spokesperson for the company, Peter Bancroft, was also on the defensive: "Microsoft isn't a monolithic company" he said, referring to the fact that Exchange Server and Windows Mobile are created by two different divisions of Microsoft.

Shares of Research in Motion dropped on the news.