Research In Motion (RIMM) shares were trading sharply higher on Friday, and Palm Inc. (PALM) stocks had plummeted, as investors reacted to both companies’ quarterly earnings results, announced late Thursday.
By 11:09 a.m. Eastern, RIM shares had soared 8.76 percent to reach $69.02, and Palm had sunk 15.96 percent to $9.85.
RIM shocked investors with its 59-percent rise in third-quarter income to $628.4 million. Sales jumped 11 percent to $3.92 billion. So what did the trick? The combination of new subscribers and record BlackBerry smartphone sales. And, most of the customer additions were consumers, not corporate users. That speaks to the BlackBerry’s ability to stand up against the in-demand Apple iPhone, analysts said.
Canada-based RIM sold more than 10 million BlackBerry devices in the third quarter; its previous record was 8.3 million, set in 2009’s second quarter.
The news was not so cheery for Palm. The maker of the Palm Pre and the Palm Pixi on Thursday reported disappointing fiscal second-quarter results. It lost $85.4 million, or 54 cents per share, when Wall Street expected a loss of 32 cents per share. Revenue amounted to $78.1 million. Palm shipped a mere 783,000 handsets in the quarter.
To be sure, Palm is facing some big challenges. Its devices are lagging in popularity behind the iPhone, the BlackBerry, the Motorola Droid and other rivals, even though its webOS platform is garnering strong reviews. The Palm Pre was the first device to feature the software; however, it’s available only through Sprint Nextel Corp., which has sold fewer of the smartphones than projected, due in part to its network and operational problems.
RIM and Palm’s latest results also speak to the intensity of competition among smartphone makers. And that raises the question – when will some of the weaker players consolidate to stand up to the likes of Apple?
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