Desperate to hold onto their lucrative share of the enterprise phone Research In Motion, the maker of the Blackberry is spending up big on research and development in an effort to stave off the Apple iPhone say analysts.
In their latest financials, the Company has forecast weak earnings for the third quarter due in part by the fact that a lot of their true blue customers are staring down the barrel of potential job cuts as the financial markets reel from one crisis to another.
Shares of RIM fell 24 percent in early trading on Friday despite the fact that the company reported net income for its second quarter ended Aug. 30 of $495.5 million, or 86 cents a share, up from $287.7 million, or 50 cents a share.
The Wall Street Journal reported, “There is fear that this is a segment where you have to spend a lot on marketing to attract customers, and this is what is eating into profits,” said Tero Kuittinen, a telecom-equipment analyst at Global Crown Capital LLC.”
RIM has been investing heavily with its carrier partners to push its brand to consumers around the world. So far, it has captured 17.4 percent of the global market for smart phones, according to market firm Gartner Inc., and 54 percent of the U.S. smart-phone market, according to the research firm IDC.
To sustain this momentum, RIM needs to ship in bulk to carrier stores in the coming weeks before the start of the holiday season. In the U.S., the company is expecting to debut the Bold, a model with improved Internet and multimedia capabilities; the touch-screen Storm, a model designed to ward off the allure of the Apple iPhone; and Pearl Flip phone with a smaller keyboard.