It can be a fine line between perfection and failure. Two competitors face off. They seem equally matched. But the results are anything but equal.

No, I'm not talking about yesterday's lopsided game between New England and Miami. Last week offered up a pair of lessons that emphasize the importance of nailing more than just the right economic trend. You have to pick the appropriate victor, too.

Consumer electronics and smartphones are easy areas to fall for. We're loading up on a growing number of sophisticated -- and practical -- gadgetry. The smartphone niche is delivering new ways to make your phone a communications lifeline to the rest of the planet.

As fate would have it, four bellwethers chimed in last week. Best Buy (NYSE:BBY) and Circuit City (NYSE:CC) provided a one-two punch in consumer electronics superstores. Palm (NASDAQ:PALM) and Research In Motion (NASDAQ:RIMM) shed some light on the smartphone market.

The disparity within their respective sectors is wide. The lessons are obvious. Mr. Market can be one blunt instructor.

The smarter smartphone
The market for enhanced wireless communications was pioneered by Palm, but it couldn't lead the market these days even if the road map were written on the back of its hand. Research In Motion's BlackBerry, Apple's (NASDAQ:AAPL) iPhone, and new Nokia (NYSE:NOK) product lines have moved the market in new directions.

Yes, this is a growing market, but don't tell Palm. Revenue fell by 11% in the company's latest quarter as the company posted a deficit and negative cash flow. I'm starting to wonder if Palm's Treo has any bloodline connection to Germany's one-hit wonder Trio, which brought us the infectious 1980s single "Da Da Da," which  keeps popping up in commercials from time to time.

They can both be brutally repetitive after the initial catchiness wears thin.

Two days after Palm disappointed investors, rival Research In Motion came through with another monster quarter. Shares soared 11% higher on Friday after the company's quarterly profits more than doubled.

Research In Motion tacked on 1.65 million new subscribers during the period, closing out the period with roughly 12 million BlackBerry users. More importantly, the company shipped nearly 4 million devices during the quarter, so the next few periods should be outstanding.

Congratulations. If you figured that smartphones would become indispensable appliances, you're right. How well you profited from that insight, though, depends on whether the horse you're riding is Palm or Research In Motion.

The retail divide
If you think pitting Palm against Research In Motion isn't a fair fight, turn your eyes away when you see Best Buy enter the ring to go mano-a-mano against Circuit City.

Best Buy kicked off the week by posting robust financials heading into the seasonally potent holiday quarter. Best Buy's fiscal third-quarter profits soared 52%, fueled by a 6.7% spike in comps at the individual store level.

The sharp performance provides a stark contrast to Circuit City's debacle on Friday. The stock plummeted 29% to hit a new four-year low after the superstore chain revealed a steep loss and warned of a lackluster holiday selling season.

Ouch. Best Buy and Circuit City both run big-box concepts selling many of the same staples. (This isn't like wondering why a small strip mall hub like RadioShack (NYSE:RSH) isn't keeping up with Best Buy's superstore appeal.) It's clear there are bigger differences between Best Buy and Circuit City than just their uniform colors.

Get it right the first time
It's easy to be wooed by the underperformers. The niche leaders typically carry thicker multiples, sending value hunters scouring for second-tier players to ride a certain segment's popularity.

But as Palm and Circuit City show, that can be a dangerous game. Circuit City's shares are trading at a quarter of what they were fetching a year ago. Palm's stock has been more than halved over the past two months.

You can bruise easily if you ride the wrong coattails. If Mr. Market hasn't taught you that lesson, brush up before you flunk out.

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Best Buy and Palm are Motley Fool Stock Advisor recommendations. Best Buy has also been singled out as an Inside Value stock pick. Learn to ride the right coattails by checking either premium research service out for free over the next 30 days.

Longtime Fool contributor Rick Munarriz  prefers shopping at Best Buy, although he remains a fan of both Best Buy blue and Circuit City red. He does not own shares in any of the companies mentioned in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.