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Could RIM's Bad News Be Good For Apple?

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Whoa! I had to do a double take when I was reporting Research in Motion's second quarter earnings on the air moments ago because I couldn't believe they were this weak.

In this case, looks were not deceiving.

RIM did in fact beat on the bottom line, reporting $1.03 against the $1 Wall Street was looking for. And the company's 44.1 percent gross margin was also better than expected and encouraging. But that good news came on lighter than expected revenue with RIM reporting $3.53 billion versus the $3.6 billion consensus. And the numbers go downhill from there: The 3.8 million subscribers comes against the 4.1 million expected; the 8.3 million Blackberrys shipped contrasts sharply with the 8.7 million analysts anticipated.

And looking at Third Quarter guidance, the news gets even more dismal, at least as far as RIM's historical performance is concerned: RIM is offering an EPS range of $1 to $1.08. Analysts were expecting $1.05. The revenue range from the company is now $3.6 billion to $3.85 billion, which falls well below the consensus estimate of $3.9 billion. RIM also expects 4 million to 4.3 million new subscribers, which is again lower than the 4.3 million Wall Street was looking for.

The snap judgment would be to take the entire smartphone sector lower based on RIM's news, but this actually might be veiled, good news for the likes of Apple . Was RIM's lackluster report a sign that the entire sector is slowing, and dramatically? Or are these numbers a result of changes in the company's release schedule for its newest handsets? Or are RIM's problems its own, spurred by stronger interest in offerings from its competitors, like Apple and Palm ? I think there's every indication that it is likely the latter, and not the former.

I say that because we got surprisingly strong numbers from Palm last week (even though the company's guidance was far lighter than expected, the damage to RIM may have already occurred in the prior quarter.) Also, channel checks from RBC, Piper Jaffray and others suggest Apple's iPhone continues to sell well. I wonder if RIM's news signals its own market share losses to its competitors, rather than an overall sector slowdown? Also, a little perspective here: RIM is still growing handset sales at around 40 percent year over year and I defy you to name another hardware company enjoying that kind of ramp. So when I toss around terms like "slowdown," take it in the context of RIM's own performance. Any other tech company would kill for this kind of growth.

Still, everyone knows the growth of which RIM is capable and when it doesn't meet or beat even outlandish expectations, investors are going to get spanked. RIM shares jumped 17 percent just ahead of these numbers, so it stands to reason that there would be a sell-off even if the numbers belie a fairly healthy quarter. And the company's softer-than-expected outlook might merely be signaling a conservative product release schedule, and RIM's got plenty of innovation in the pipeline. Small tweaks to release dates could have a dramatic impact on the company's third quarter performance despite what kind of guidance the company is offering tonight.

I still hold fast to the concept that the smart phone sector is more than robust enough to support multiple, big winners. And I have no doubt, even with today's report, that RIM will continue to be one of them. I talked with one analyst after the numbers came out tonight and he told me that after investors get a chance to digest the numbers, they'll look at the big sell-off in RIM shares as an entry point.

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That's something to consider. Meantime, I still believe that the concept will be proven that when RIM suffers, Apple soars. We'll see if that's the case when Apple gives us its iPhone sales figures in a few weeks.

Questions? Comments? TechCheck@cnbc.com