The company, which faces mounting competition from Apple's iPhone and from Nokia's latest e-mail phone devices, pointed to slower subscriber growth and weaker margins.

In a surprise announcement on Tuesday night, RIM said it expected fiscal third-quarter revenue of US$2.75-$2.78 billion -- 9 percent below the midpoint of analysts' forecasts, which ranged from $2.77 billion to $3.10 billion.

Adjusted earnings are now expected to be 81 cents to 83 cents per share, compared with the 89 cents to 97 cents per share the company had initially forecast for its third quarter, which ended November 29.

Analysts, on average, had expected 89 cents a share on revenue of $2.92 billion, according to Reuters Estimates.

"Product launch timing, general economic conditions and foreign exchange volatility have tempered our results in the third quarter," Co-Chief Executive Jim Balsillie said in a statement.

It was a sharp contrast to the bullish tone he took just two months ago when the company reported strong second-quarter results in late-September.

Research in Motion was widely considered one of the leading stocks of the last tech investment cycle along with Apple Inc, Google Inc and Amazon Inc, which collectively were dubbed the Four Horsemen of Tech.

RIM stock reached a record high of nearly $150 on Nasdaq in June, but has since plunged. It was indicated nearly 7 percent lower at $34.38 ahead of the market open, which would put it 77 percent below June's peak and at its lowest in over 2 years.

"Profits are being impacted by exchange rates but the fact that subscriber additions and shipments both look set to fall below expectations is tangible evidence that the market is slowing considerably in Q4," said analyst Geoff Blaber at CCS Insight.

"Whilst smartphones will be a growing segment in a shrinking market next year, this is further evidence that growth looks set to slow considerably compared with 2008."

SUBSCRIPTIONS WEAKER

Investors had already debated how long the phonemaker, which has a large corporate market, could defy the economic downturn. Nomura Securities telecoms equipment analyst Richard Windsor said the downgrade was not completely unexpected.

The company was not making as much money on 3G models as it had on models based on older 2.5G technology, Windsor said, and its profitability was moving in line with Nokia's e series and Taiwan's HTC, which makes phones based on Microsoft and Google software.

"As the mix moves to 3G, they will continue to take a margin haircut," he said.

Research in Motion's slowing subscriber growth coincides with the release this week by Nokia of a new set of models that aim to compete with the BlackBerry.

Nokia, the world's top cell phone maker, is expected to lower it mid-term profit forecasts at a global investor day in New York on Thursday.

Research in Motion's move follows a similarly dire warning on Monday from long-struggling smartphone maker Palm Inc, maker of Treo and Centro devices, which said revenue for its latest quarter would fall from one-third to nearly one-half below Wall Street's already depressed expectations.

RIM's revised earnings forecast excludes the negative effect on RIM's tax rate from the depreciation of the Canadian dollar relative to the U.S. dollar, it said. Third-quarter tax rates will range from 40 to 42 percent, a sharp hike from 29 to 30 percent rate in the second quarter.

The expected number of net new BlackBerry subscriber accounts added in the quarter would be about 2.6 million, 10 percent below its previous forecast for 2.9 million, RIM said.

But despite the lower results, the company said it had "experienced particularly strong momentum in recent weeks," which had continued into its fourth quarter.

RIM enjoyed a record number of weekly net new subscribers in the final week of November following the U.S. release of its hit BlackBerry Storm device.

The Waterloo, Ontario-based company, which on Wednesday said it planned to buy encryption software company Certicom Corp in a C$66 million deal, will report final third-quarter results and issue a fourth quarter outlook on December 18.

(Additional reporting by Tarmo Virki in Barcelona and Sakthi Prasad in Bangalore, Editing by Ian Geoghegan and Paul Hoskins)