In a tumultuous week on the markets, the big news for the tech sector was Research in Motion falling short of Wall Street's first-quarter expectations, and Oracle's caution about the current quarter.

Even though RIM and Oracle had strong quarters, IT investors jumped on the uncertain forecasts in a week of general economic worry. The price of crude oil jumped Thursday, and the financial sector was rocked by analyst downgrades of Citigroup. The tech-heavy Nasdaq dropped by 79 points to close at 2321. Though tech companies did surprisingly well in the first quarter, continuing concerns about energy prices, financial markets and consumer spending have taken a toll on tech vendor share prices this year.

RIM said Wednesday that first-quarter net income increased to US$482.5 million, or $0.84 per share, compared with net income of $223.2 million in 2007. Revenue rose a whopping 107 percent to $2.24 billion from $1.08 billion.

RIM added about 2.3 million BlackBerry subscribers in the quarter, exceeding the 2.2 million additions forecast by the company. Just as important, almost 60 percent of the new subscribers were nonbusiness users, who now count for about 40 percent of RIM's total subscription base, the company said. For RIM to keep growing it needs to expand into the consumer arena and it appears that it has been doing just that.

So why is RIM's share price dropping? RIM shares closed Thursday at $123.46, down by $18.88. The immediate problem is that higher expenses and shrinking margins caused the company to miss the high expectations of analysts. Analysts polled by Thomson Reuters had forecast revenue of $2.27 billion and earnings of $0.85 a share.

The company said the higher-than-expected expenses were due to increased marketing costs in advance of new product launches such as the BlackBerry Bold, a 3G (third-generation) device packed with multimedia features and expected to be released over the next two months.

RIM's forecast for current-quarter revenue is in the range of $2.55 billion to $2.65 billion, and earnings in the range of $0.84 to $0.89 a share. Analysts have been expecting revenue of $2.43 billion and earnings of $0. 90 per share.

Though the company faces competition from Apple and others, the BlackBerry has a solid reputation and many analysts are still taking the long view.

The IDG News Service is a Network World affiliate.