RIM Cuts Forecast

RIM, the sixth largest mobile phone manufacturer in the world, cut its sales and profit forecasts for 3Q, which ended on Saturday. The makers of BlackBerry expect revenues from the fiscal quarter to come in between $2.75 to $2.78 billion, marking a dip of 9 percent from midpoint analyst forecasts.

Adjusted earnings for the company are expected to be 81-83 cents a share, as opposed to the 89-97 cents per share the company initially forecast for the quarter. Additionally, RIM earlier expected to add about 2.9 million subscriber accounts, but the actual number will be closer to 2.6 million new subscriber accounts, about 10 percent below expectations.

The sinking economy is likely to blame for the lower than expected earnings. And while smartphones remain a popular gadget for consumers, the overall marketplace for mobile device spending has been shrinking, even though smartphones, such as the BlackBerry Storm and Apple iPhone, are gaining popularity.

"Whilst smartphones will be a growing segment in a shrinking market next year, this is further evidence that growth looks set to slow considerably compared with 2008," Geoff Blaber, CCS Insight analyst, told Reuters.

This comes as a blow to the company who recently released the highly anticipated BlackBerry Storm, the first touch screen device offered by RIM and a clear attempt to break into the consumer market and realize some of the profits Apple's iPhone has been seeing for itself.

Still, Jim Balsillie, Co-CEO at Rim, believes that the Storm will help the company produce positive results for the fourth quarter.

"Initial sales of new products have been very positive and we believe we have the strongest smartphone portfolio in the industry by far. However, product launch timing, general economic conditions and foreign exchange volatility have tempered our results in the third quarter," said Balsillie in a statement. "We believe RIM is well-positioned to capitalize on the increasing smartphone market opportunity and we remain focused on driving growth in the fourth quarter of fiscal 2009 and beyond."

RIM will report its final third quarter results and hold its quarterly earnings conference call on December 18.