JP Morgan is previewing Research in Motion (NASDAQ:RIMM) noting that at the threshold of a new product cycle, they would remain buyers of RIMM but the possibility of conservative F3Q guidance (associated with uncertain product timing) could present investors with a more attractive entry point. Firm believes the uncertainty will be resolved by the Feb. quarter, by which time, they believe RIM will be poised to capture percentage points of market share from incumbent handset OEMs, and demonstrate earnings leverage off a new level of operating expense.

JPM expects F2Q09 results to meet or beat expectations, owing to continued strength in Pearl and Curve sales and strong early adoption of the Bold, internationally. Firm looks for RIMM to report $0.85 GAAP EPS on sales of $2.95bn, which puts them slightly below consensus (but without strong conviction). They acknowledge cyclical headwinds but believe enterprise adoption remains solid, and consumer adoption is accelerating. Channel and end-market results reveal massive share gains. JPM looks for RIMM to ship 6.2m units, at a blended ASP of $349 and for 2.63m net subscriber additions. A massive 28% q/q increase in operating expense was signaled in prior guidance. They see modest risk to gross margins, offset by potential unit shipment upside.

They expect RIMM’s new product cycle to propel the firm into a leadership position in the global handset industry. There is, however, near-term risk relating to the timing of product introductions – which could lead RIM to issue cautious F3Q guidance. However, the firm believes the uncertainty will be fully resolved by F4Q09. They are looking for F3Q guidance to align with their forecast of $0.98 GAAP EPS on sales of $3.0bn, 7.3m units, $346 ASPs, 2.94m net subscriber additions.

Maintains Overweight RIMM is trading at 18.6 times FY10 PF EPS estimate of $5.25, in line with the mean of coverage, but a 41% discount to its two-year historical average of 31.5 times.

Notablecalls: RIMM's a niche player but growth is surely slowing. While everyone is still talking about the growth potential outside of US, it's becoming clear Bberry will not be as successful there. Also, now we have HTC, NOK and even GOOG coming out with similar QWERTY handsets.

I have been talking to one savvy RIMM watcher who thinks RIMM will need to hit $80 for him to become more positive on the name. I tend to agree with him here.

RIMM's a great trading vechicle but n-t risk is to the downside.