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The five top smartphone stocks of 2009 Add to ...

Smartphones are hot, and so are their stock prices. Here are five to watch in the coming months.

Research In Motion

Research In Motion is still the biggest player in the U.S. smartphone market, thanks to the popularity of its BlackBerry phones. But the market started to get a little crowded in 2009, and RIM shares were pushed aside a bit.

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The numbers: RIM's run as the trusty email tool for business users and an increasing number of non-business emailers has been challenged by a host of new devices. Even so, RIM managed to hold on to its No.2 market spot, raking in 21 per cent of the worldwide market. Leader Nokia fell to 39 per cent from 42 per cent a year ago.

The stock: RIM shares are up a respectable 44 per cent this year, but lagged the pack by a wide margin. In an era of touchscreen-driven, swipe-and-poke software, the current device trend threatens to leave the BlackBerry behind unless RIM adapts quickly.

Motorola

Over the past two years, Motorola nearly disappeared from the smartphone market until last month's arrival of the Google Android-powered Cliq phone at T-Mobile and the Droid phone at Verizon.

The numbers: Analysts expect Motorola Android phone sales to reach one million units this year even with a troubling Droid start at Verizon that kept Wall Street guessing. While the Droid phone is not an Apple iPhone killer, analysts expect it to help Motorola reach an Android phone sales target of 10 million units next year.

The stock: Motorola shares, after falling 80 per cent between 2007 and the end of 2008, are up 79 per cent this year. With more than 20 new smartphones on deck for next year and most of them expected to run on Android, Motorola has started to convince some investors it can thrive again.

Google

Google has plans to enter its own phone in the smartphone arena, but this year was the big coming-out party for its wireless operating system Android. Running on more than a dozen phones already selling or planned for introduction at the top four U.S. telcos, Android has enjoyed a tremendous debut.

The numbers: Gartner analyst Kevin Dulaney made a bold prediction in October that Android would rank second only to Nokia's Symbian as the top smartphone operating system. HTC's four Android phones helped make it the fastest growing smartphone player in the third quarter. The big gains by Android have already helped bury Microsoft's Windows Mobile system as phone makers looked for more stable, flexible software for their new crops of smartphones.

The stock: Google shares are up 88 per cent this year as Internet advertising has shown signs of recovery. And though 97 per cent of Google's revenue comes from search ads, the prospect of extending its search service to mobile devices certainly helps bolster the bullish story for Google.

Apple

Apple's iPhone had a breakthrough year. The $99 2G iPhone and the $199 iPhone 3GS gave AT&T both a low road and a high road to blockbuster sales.

The numbers: Apple sold 7.4 million iPhones in the most recent quarter and gained four percentage points of market share worldwide to climb to third place with 17 per cent of the market. The iPhone is in its third year, its final year as an exclusive to AT&T in the U.S. As international expansion continues, there have been questions about what service provider will land the iPhone next in the U.S. Until Monday, the presumed next destination was Verizon, but Weisel analyst Doug Reid predicts a detour to T-Mobile.

The stock: Apple shares are up 133 per cent this year as the Cupertino, Calif. gadget shop continues to make magic with consumers and investors. The big challenge: How Apple will keep that momentum going.

Palm

Palm basically invented the smartphone 10 years ago and then watched while upstarts RIM and Apple captured the market. This year, Palm reinvented itself as the up-and-coming challenger in the market and investors bought it.

The numbers: Palm introduced the Pre phone running on its WebOS software in June to a great deal of anticipation but only limited consumer demand. Early sales numbers were anemic and have stayed weak. To drum up interest, the price of the Palm Pre was cut during Black Friday to $80, down from the original $200 charge and below the $150 price more recently.

The stock: Palm outpaced the entire smartphone pack and posted a whopping 258 per cent gain so far this year. That performance includes a drop of 38 per cent in the past two months as the Android attack intensified.

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