Blackberry shares drop 12% after tablet development costs reveal



RIM

RIM

Research in Motion, the company who produce the Blackberry range, saw shares drop 12% while trading was closed last night, after an announcement that profits would be lower than expected for the quarter because of the cost of developing the new Playbook tablet.

The fall was still a surprise as the company announced £579million profit for the last quarter, 31% up on the year before and in line with expectations.

The company blamed the cost of developing the new tablet computer, as well as customers opting for cheaper handsets within the Blackberry range.

The company saw revenues increase 36% to $5.6billion which was still slightly short of expectation.

The results, which were released after the close of the Nasdaq exchange, also revealed that the company had seen their US market share slowly eaten up by smartphone rivals, including Apple.

Nearly half, 48%, of their market is now outside the key markets of the US, Canada and the UK.

Growth in the new markets had followed a shift in focus towards producing more lower end entry level handsets, for the cheaper end of the phone market.

RIM are now hoping the release of their new tablet, the Playbook, will see the company enter a new market, with their new tablet half the size of an Apple iPad.

“These are investments in the future,” said co-chief executive Jim Balsillie, explaining extra money that they have spent on developing for the future.

“I have many corporate clients that have approached us about, you know, each wanting tens of thousands, several tens of thousands of Playbooks.”

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