Most handset stocks dipped Wednesday, with Motorola Inc.'s shares declining even as an analyst indicated the struggling cell phone maker is likely to benefit from the combination of Clearwire and Sprint Nextel Corp.'s wireless broadband units.
Motorola shares fell 26 cents, or 2.6 percent, to $10.
Clearwire and Sprint Nextel said Wednesday they will combine their wireless broadband units to create a $14.55 billion communications company named Clearwire. The company will focus on rolling out a mobile network based on the emerging WiMax standard.
"Motorola, via its long-standing relationship with (Clearwire founder) Craig McCaw and support of WiMax, is well-positioned to benefit from the billions of dollars in capex and device sales likely to occur through the joint venture," Cowen and Co. analyst Matthew Hoffman said in a client note.
Also Wednesday, billionaire investor Carl Icahn reported he raised his stake in Motorola to 7.6 percent from 6.4 percent in a filing with the Securities and Exchange Commission.
American Depositary Shares of competitor Nokia Corp. rose 18 cents to $29.82.
Meanwhile, shares of iPhone maker Apple Inc. declined $1.13 to $185.53.
In a client note, Goldman Sachs analyst David C. Bailey said he doesn't think Synchronoss Technologies Inc.'s Tuesday report of lower-than-expected first-quarter activations of iPhones on its network indicates softening demand for the handset.
Synchronoss is the exclusive iPhone activation service company for AT&T Inc., he noted. AT&T is Apple's exclusive wireless service provider in the U.S.
"We think the key factor behind Synchronoss's shortfall is the higher than expected volume of unlocked Apple iPhones, which are being deployed with other carriers and in other geographies," Bailey said.
Elsewhere in the sector, shares of BlackBerry smart phone maker Research In Motion Ltd. rose 3 cents to $132.13, while shares of rival and Treo maker Palm Inc. declined 16 cents to $5.63.
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