Research in Motion News Affecting Apple, Nokia, Palm

The sharp sell-off in Research In Motion (RIMM) shares today has sucked Apple (AAPL), Nokia (NOK) and Palm (PALM) down in its wake. There are two obvious reasons for that.

One, RIMM yesterday said it plans to bulk up its spending on marketing; you can think of the stock today as Research In Marketing. The company said it will increase sales and marketing expenses by 28-30% sequentially in the August quarter, which is nearly twice the expected growth in revenues. RIMM is getting ready to launch its 3G Blackberry Bold, and the Street expects other new products to follow. Apple, of course, will start selling the 3G iPhone July 11. And there are other new phones coming from Samsung, HTC, Nokia (NOK) and others. As I noted in a previous post, JMP Securities analyst Samuel Wilson says that RIMM seems to be “gearing up for a war with Apple.” So there are concerns that Apple, Nokia, Palm and other plays may need to fight fire with fire.

The other issue: RIMM said on its conference call yesterday that the weak dollar has triggered price increases from some of its component suppliers, pressuring margins. Some investors obviously think that the same factor could affect margins at Apple, Nokia, Palm and other handset makers.

Apple today is off $6.27, or 3.5%, to $171.12. Nokia is down 66 cents, or 2.5%, to $25.44, while Palm (PALM), which reports earnings after the close this afternoon, is down 39 cents, or 5.7%, to $6.45.

Comments

[Brewer]

RIM is like a deer caught in the headlights. They have absolutely no technology to compete with Apple, so they are now sinking vast amounts of money into marketing. Let me get this straight. They are going to try to go head to head with Apple on marketing?

I'd like to see Apple put a primitive Blackberry in John Hodgeman's hand. (PC would not be using an iPhone, he would be using a blackberry, 'natch.)