Wireless Email Means Heavy Competition for RIM

Research In Motion's shares fell significantly yesterday as investors didn't exactly know what to make of the company's first quarter results that were published and showed signs of competition getting much stronger in the wireless email market. There's also the possibility of having expectations much greater than what the company could actually make for this quarter.

On Wednesday, Research In Motion said it earned $132.7 million, or 67 cents a share, in the first quarter, which ended in May. A year ago the net income reported was of $54.9 million, or 28 cents a share. Analysts expected to earn 55 cents a share in the first quarter on sales of $452 million.

The shares dropped $2.04 to $73.87 on the Nasdaq stock market, but increased from the $71.41 they reached for a brief time during extended-hours trading after the company reported late Wednesday.

The number of real subscribers reported by RIM as very different from what specialist had expected, the numbers reported by RIM being by far inferior to what they were supposed to be. However, the company beat most sales and profit expectations.

The Waterloo-based company said it was servicing about 592,000 new users in the three months ended May 28, bringing its base to 3.1 million users. Some analysts had hoped for as many as 650,000 new accounts. Moreover, RIM forecast that it would have between 620,000 and 650,000 subscribers this quarter, while some analysts foreseen the number of new subscribers to almost 800,000.