RIM’s Q2 Profit Drops; Falls Short of Analysts’ Expectation

Blackberry maker Research in Motion has announced its fiscal second-quarter results that were below analysts’ expectations. Although its revenue rose and sales of its Blackberry devices were up, RIM reported a year-over-year drop in earnings, which makes analysts wonder if the company is losing its edge in the increasingly competitive smartphone market.

For the quarter ended on August 29, RIM earned $475.6 million, down 4 percent from $495.5 million in the same quarter last year. Revenue increased to $3.53 billion from $2.58 billion a year ago, but failed to come in line with analysts’ forecast of $3.63 billion. Meanwhile, the 8.3 million Blackberry devices it shipped and the 3.8 million new subscribers it added during the June-August period were also less than expected.

Still, the Canadian smartphone vendor is optimistic about its outlook. Jim Balsillie, RIM’s co-CEO explained the fall in quarterly earnings was caused by the charges for a patent settlement. Although its performance did not meet expectations, RIM still saw strong sales of BlackBerrys that in fact, shipments for the second quarter enjoyed a 40 percent year-over-year surge.

He added that the company is in a good and prosperous position, and its strategies of moving beyond corporate market to target consumer market have been going well, as more than 80 percent of its new subscribers are consumers. The goal for this quarter is to make its Blackberry devices more popular.

RIM has been known as the leadership in the enterprise field in the United States. But as the market becomes saturated, the company has diverted its focus to the consumer market where competition is keen. Other than rivals like the rapidly-growing Apple iPhone, Google Android phones are also gaining momentum that more vendors, such as Motorola, are launching their Android-powered handsets soon. Even the Palm Pre did relatively well during the second quarter, despite the fact that it was being exclusively sold on Sprint Nextel.

With the holiday season coming, RIM says it is well-prepared with new devices like the BlackBerry Tour 9630 and the Blackberry Curve 8520. Also, it is expected that the Canadian vendor will introduce new versions of two high-end models, the Storm and the Bold, later this year. Hopefully this addition will help RIM attract more subscribers and improve its financial results.

Tags: BlackBerry Accessories, BlackBerry Tour 9630 Accessories, BlackBerry Curve (Curve 8520) Accessories, iPhone Accessories, Motorola Accessories, Palm Pre Accessories