The market is a discounting machine, as BlackBerry maker Research In Motion's (NASDAQ:RIMM) quarterly results showed today. What premium would you pay for a 72% increase in net income in the second quarter, on strong BlackBerry sales? How about a one-fourth discount to yesterday's closing stock price?

Sorry, RIM. Expectations of that result may have helped your stock six to 12 months ago, but that's yesterday's news. Old hat. Dead and buried. Instead, the market focused intensely on lower-than expected profits in the current quarter, because of increased marketing costs associated with new product launches. (RIM is launching at least three new handsets by year's end.)

Formidable new rivals
As the line between mobile computers and mobile phones grows increasingly blurry, RIM finds itself competing with the big boys in the handset industry, including Nokia (NYSE:NOK), Motorola (NASDAQ:MOT), Samsung, and LG. And let's not forget the new (but powerful) entrants in this market: Apple (NASDAQ:AAPL) and its wildly successful iPhone, and online search king Google (NASDAQ:GOOG), which is launching its G1 phone next month. Running on an open-source platform, the G1 could mark a critical juncture in the development of the smartphone market.

You're confident of that?
RIM Co-CEO Jim Balsillie expressed confidence that his firm won't be hit by these new entrants, but it's tough for me to muster up any degree of certainty in that prediction.

Sure, smartphone sales are growing at a good clip -- research group Gartner (NYSE:IT) clocked worldwide growth in the worldwide smartphone market at near 16% in the second quarter, predicting even higher growth in the third quarter.

And sure, Research In Motion has been nimble and successful so far, and it's in a very hot market. However, that prime spot now places RIM in an even hotter contest for growth and profits. Investors in RIM (and the overall industry) need to accept -- if not embrace -- that fact.

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