BlackBerry maker in a dive as its costs mount
Shares in Blackberry maker Research in Motion are on the slide, after the firm noted the hefty costs of playing catch-up with arch-rival Apple.
RIM reported profit for the past three months of $934 million (£577 million), in line with Wall Street expectations.
But it warned the cost of developing the new tablet-format Blackberry, the Playbook, as well as a migration of consumers towards cheaper handsets in its product range, would hit future earnings.
The stock fell 12% in after-hours trading in New York.
Analysts say its share of the US market has been eroded by smartphone rivals.
RIM is banking on the Playbook to regain the initiative. It will be half the size of Apple's iPad and will be compatible with Google's Android operating system. RIM's news comes just as the iPad 2 is launched in the UK.
"These are investments in the future," said co-chief executive Jim Balsillie, explaining the unexpected increase in money spent on research, development, sales and marketing.
He says he is optimistic about the potential for the PlayBook with corporate customers showing great interest. "We feel great," Balsillie said. "It's a transition. It's got legs to sustain us indefinitely. We are investing very heavily in this transition."
Revenues were up by a third to $5.6 billion.
