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The smartphone specialists are coming under increasing pressure, as midrange models become commoditized and a business of scale, while the consumer spending slowdown threatens uptake of high end super-handsets. Those most vulnerable are the companies that rely almost entirely on smartphones, without other devices to balance their revenue streams, and so deeper losses at Palm and worries about RIM's next results came as little surprise.

Palm posted a net loss of $39.5m for its quarter ended August 31, up from a loss of $841,000 in the same quarter last year. Revenue was up 1.7% to $366.9m. The good news was the rise in unit shipments, up an impressive 49% year-on-year and enabling Palm to break the one million barrier. But the bad news was the steeply reduced margin Palm can command for those phones now that it is targeting more mainstream markets, and facing rising competition and squeezed consumer budgets.

The even worse news, largely responsible for a 7% fall-off in the share value on announcement of results, was that the Centro, Palm's first real high volume model, peaked in August in shipments terms, according to the vendor. This led some analysts to warn of a revenue slump from now until the Nova kicks in - Nova is the codename for Palm's successor to the Treo, but will not launch until the first half of next year. Meanwhile, the Treo Pro looks good, but is launching in the important US market without a major carrier.

Meanwhile, despite being poised for a strong quarter with double-digit earnings growth, RIM is beset by investor nervousness about its medium term future in the increasingly pressurized smartphone sector, and about the high costs involved in its make-or-break product upgrade cycle. Worries about this have sent RIM's usually high stock price falling by more than 25% since its last earnings report in late June. However, its results, to be announced on Thursday, are expected to show a 74% growth in earnings to about 87 cents a share, according to analyst consensus. Revenue is expected to grow 89% to $2.6bn. Though these results sound strong, before RIM's statements in July the markets had hoped for still higher earnings, and the device maker has warned of the need to increase spending to develop and launch its broadened range of products.

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