Wedbush Morgan thinks Electronic Arts' (ERTS) steep research and development costs should start to fall and since the co uses cash flow for R&D, both cash flow and EPS should swell. Electronic Arts' revenue from mobile games reached $100 mln in the nine months, up from virtually nil a year ago. It's sure to keep climbing as cellular networks speed up and handsets get better at displaying games.
RBC notes smart-phone sector growth, and competition, is intensifying. While Research in Motion (RIMM) retains strong competitive advantages, firm says its battle has shifted to two fronts (business, consumer) with renewed competitive pushes within both. Apple (AAPL) iPhone's threat to RIMM's consumer push may be less than feared, but its launch (June) is expected to be splashy and pervasive, with healthy initial uptake. Firm expects some related RIMM valuation impact, until the actual threat (or not) to RIMM's consumer momentum becomes clearer. Firm also notes RIMM's Option review may be wrapping up, and, firm expects a strong 4th quarter (1 million + sub adds, above guidance) above consensus. The firm believes these catalysts, however, are priced into valuation, and subscriber, shipment impact from these developments incorporated into their current F08 $5.00 EPS est.