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RIM (NASDAQ: RIMM) is the most recent handset company to cut sales forecasts as the recession hits demand for smartphones. It has to make investors wonder what will happen to Apple (NASDAQ: AAPL) iPhone sales.
RIM expects revenue for the third quarter to be in the range of $2.75-$2.78 billion. Preliminary revenue is lower than the previously forecasted revenue range of $2.95-$3.10 billion Part of the reason for the earnings cut was the value of the dollar.
But, a large part of the revision is because of a retreat in buyer appetites. According to the company, much of the weakness is "due to lower than estimated unit shipments of existing products, which RIM believes is a reflection of general economic weakness in the United States."
Palm (NASDAQ: PALM) recently said it expects its revenue to drop sharply below estimates. Nokia (NYSE: NOK) also said its business would not meet plans.
That leaves Apple and the question of whether the iPhone is simply so popular that it is "recession proof".
In an economy this bad, probably not.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-03-2008 @ 10:01AM
Beltway Greg said...
Does anyone find it a tad odd that when a product is released it is touted as an IPhone killer ad nauseum but when it doesn't live up to expectations it's failure is linked to the economy? Yesterday I was at a holiday gathering and an older lady was showing the other older women present her new IPhone.
Some expressed fear and trepidation at using such an advanced technological marvel. Her response: "Dont' worry, buy the phone and they'll teach you how to use it at the store. I take classes and I know more about it than my grandchildren." Surely some of RIMM's subscriber loss is related to the IPhone.