Blackberry-maker Research in Motion (RIM) is facing a torrid third quarter as it comes up against competition from Apple's iPhone, new devices from Palm and Google's nascent Android platform.
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The Ontario-based company - which hit the headlines over the summer when it attempted to buy parts of Nortel - has just reported Q2 2010 results for the three months to the end of August, showing sales of $3.53bn (US), up 3% year-on-year.
Net profit also declined 4% from this time last year to $475.6m, a more modest slide than many other suppliers have been seeing recently, but still enough to miss previous expectations and send its share price tumbling.
Co-CEO Jim Balsillie said the firm was "entering the second half of this fiscal year and approaching the holiday buying season with an impressive product portfolio, continuing business momentum and strong marketing support from our partners around the world."
But despite RIM's optimism, analysts have been quick for forecast a tough few months for the supplier. Average selling prices in the smartphone market are still declining, and with much of the Blackberry's appeal lying in the hamstrung corporate market, the sales outlook is less than outstanding.
RIM says it is aggressively pursuing the cheaper end of the market, particularly consumers, and its Blackberry 8520 Curve has been a steady-seller, but the company will have to shift a lot of kit at a lower price point in the run up to Christmas if it wants to turn things around.
A version of this story originally appeared on Microscope.