RIM blames trimmed profits on new products

16 Feb 2009

A RIM executive has defended the company's pricing practices after the company's profit warning.

RIM said last week its quarterly result would come in at the low end of expectations, despite a surge in sales over Christmas.

It expects net subscriber additions for the quarter to be more than 20% above forecast. The company has increased revenue fourfold in the past two years but profit has increased just three times, prompting critics to say it is squeezing margins in pursuit of sales.

But RIM's Asia-Pacific vice president Norm Lo said the results reflected the introduction of new consumer-focused products.

"It's because of the product mix, because of the new products, it's not because our margins have been compressed," he said.

He said the company would persevere with touchscreen devices, despite the mixed response to the BlackBerry Storm, launched late last year.

"Its really core to our own strategy of offering choice to the marketplace," said Lo. "RIM"s strategy is to grow and innovate on the enterprise side, as well as to continue to broadband our consumer business."

He said the strength of BlackBerry was as a solutions platform, not just as a gadget.

For that reason RIM believes it is better-placed than traditional handset-makers to compete with the iPhone and Google's Android. Software developers have been working with its applications development platform for ten years already, Lo said.

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