Research In Motion have taken a drop in share price after they reported revenue from the latest quarter which fell short of expectations. They also said that sales in the current three month period are shifting to cheaper models.
RIM shares dropped $6.59, or more than 10 percent, at $57.50 in extended trading after the company posted three month results ending Feb 26th.
They posted net income of $934 million, or $1,78 a share for the fiscal fourth quarter. That was up 31 percent from $710 million, or $1.27 a share, a year before.
Revenue rose 36 percent to $5.6 billion, short of the $5.65 billion expected by analysts. Rim said they expect earnings of $1.47 to $1.55 a share, which is short of the forecast $1.65. They claim that because cheaper phones are making more sales in recent months and that they are spending more money on research, development, sales and marketing, especially on their new tablet, the Playbook.
Jim Balsillie, RIM Co-CEO said “These are investments in the future. I have many corporate clients that have approached us about, you know, each wanting tens of thousands, several tens of thousands of PlayBooks.” Balsillie said they are selling more of their cheaper phones because more BlackBerrys are sold without contracts. Such phones aren’t subsidized as much by the wireless carriers, so they’re usually cheaper, entry-level models.
KitGuru says: RIM have alot riding on the success of the Playbook, and it goes on sale on April 19th in the states. It is designed to work as a standalone tablet and as an accessory for the BlackBerry phone.