Noting record sales for its third quarter, Blackberry-maker Research in Motion Ltd. (RIM) has reported better revenue guidance for the fourth quarter, predicting even higher sales helped by pent-up demand for its new smartphones in the holiday season. RIM's rival, Palm Inc., however, reported a bigger quarterly loss, as revenue from its smartphones fell 39%.

On Thursday, RIM posted revenue of $2.78 billion for its fiscal third quarter, which ended November 29 - up 66% from last year's $1.67 billion in the same quarter - and added 2.6 million new subscribers. Excluding one-time charges, RIM said its profit was $477.3 million, 7 percent higher from the same period last year.

The company expected to post sales of $3.3 billion to $3.5 billion, and add 2.9 million new subscribers, for its fourth fiscal quarter, which ends February 28.

Co-CEO Jim Balsillie said on a conference call the volume of shipments was expected to rise between 7.5 million to 8 million in the next quarter. He said: "Despite the current turmoil in the economy we believe RIM is well positioned to take advantage of the industry shift to smart phones."

RIM has been targeting the consumer market after enjoying success in the corporate market for years. But, the aggressive expansion that the Canadian company undertook, pushing into mass consumer markets, has eroded its profit margins.

Analyst Deepak Chopra, Genuity Capital Markets, said though RIM now has lower margins, it is selling more BlackBerrys. He added: "The BlackBerry is gaining market share versus other wireless products. The products are moving."