RIM cuts Q3 forecasts

In proof the smartphone industry is not immune to the economic crisis, Research In Motion (RIM) has been forced to cut its quarterly profit estimates on the back of slumping sales and a related 10% subscriber shortfall.

The company now expects to gain 2.6 million new subscribers in the company's Q3, 10% below its previous forecast of 2.9 million. RIM expects to earn $2.75-2.78 billion, 9% lower than its earlier forecast of up to $3.1 billion.

"Product launch timing, general economic conditions and foreign exchange volatility have tempered our results in the third quarter," said Jim Balsillie, Co-CEO at RIM.

The company predicts that around a third of the shortfall can be attributed to the depreciation of certain foreign currencies against the US dollar.

RIM's projected Q3 profit and subscriber additions nevertheless represent a 65% and 57% year-on-year growth, respectively, and the company believes it is well placed to weather the storm.

"We believe RIM is well positioned to capitalize on the increasing smartphone market and we remain focused on driving growth in the fourth quarter of fiscal 2009 and beyond," Balsillie said.