Shares in Nokia and other European wireless firms rose on Friday, helped by strong results from Research in Motion, but gains were capped as analysts said the Blackberry-maker’s success seemed mostly company-specific.

RIM posted better-than-expected quarterly earnings late on Thursday and gave a rosy outlook that signalled further growth as consumers embrace its newest phones despite the global economic slowdown.

Shares in RIM jumped more than 20 percent in after-hours trading on Thursday.

Shares in Nokia rose more than 2 percent early on Friday before cooling to 0.2 percent higher at 9.98 euros by 8:25 a.m. British time, after an 11 percent jump on Thursday.

Shares in Ericsson were up 2.4 percent, while Alcatel-Lucent

was 1.6 percent higher, shares in chip firms Infineon and ARM were up 1.1 and 0.5 percent respectively.

The wider European market fell after Thursday’s rally, with the FTSEurofirst 300 index down 0.7 percent.

The cellphone market is expected to see its toughest year ever in 2009 with consumers cutting spending on new gadgets, but sales of smartphones like the Blackberry are still expected to rise some 10-20 percent.

“We continue to believe in smartphones and also believe RIM is already emerging as one of the key vendors,” analysts at Raymond James said in a research note.

“RIM’s impressive growth in net subscriber adds despite the current macro backdrop shows that not all smartphone vendors are equal,” the analysts said.

RIM is the world’s second-largest maker of smartphones, ahead of Apple. Both of them have lately won share from top smartphone maker Nokia.

The focus in the phone market this year has shifted increasingly to smartphones, as operators move subsidies to support consumers buying the feature-packed devices, which can generate more data revenue.

“These results confirm that the economic environment is impacting more the mid-tier than the high-end or low-end,” said Gartner analyst Carolina Milanesi.

SOME FRESH AIR

Milanesi said the market was still challenging for the handset makers with retailers still trying to clear inventories due to a sharp slowdown in demand in late 2008 and from tightening credit.

“Some markets have shown some signs of improvements, like North America, India and China. But this is still a case of things not getting any worse rather than things getting better for the majority of the markets,” Milanesi said.

“Ever since the Texas Instruments update, investors have been suspecting that markets may have gotten too pessimistic about the handset market in the first quarter,” said Tero Kuittinen, analyst with GC Research.

“The RIM report seems to lend support to these suspicions,” Kuittinen said.

On March 9 Texas Instruments said orders started to improve in January and February and raised its quarterly revenue outlook very slightly, but would not forecast a recovery for the battered chip market.

Shares in Nokia are up 50 percent since hitting a more than 10-year low of 6.67 euros on March 9.

(Reporting by Tarmo Virki; Editing by Mike Nesbit and Erica Billingham)

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