June 26 (Bloomberg) -- Research In Motion Ltd., the maker of the BlackBerry e-mail phone, fell the most in almost seven years on the Nasdaq after forecasting earnings that missed analysts' estimates on higher spending to fight Apple Inc.'s iPhone.

Second-quarter profit will be as low as 84 cents a share, the Waterloo, Ontario-based company said yesterday. That missed the average prediction by analysts of 92 cents, according to a Bloomberg survey.

Research In Motion is spending more on marketing and product development amid mounting competition from the iPhone and devices such as Palm Inc.'s $99 Centro. While the company's sales forecast beat estimates, investors are concerned that profitability may not improve after a period of higher spending, said JMP Securities LLC analyst Samuel Wilson in San Francisco.

``They're gearing up to battle with Apple,'' said Wilson, who cut his rating on the stock to ``market perform'' today. ``They're spending a lot of money on things like branding campaigns.''

The report marked Research In Motion's first earnings disappointment in five quarters. The stock had more than doubled in the past year as co-Chief Executive Officer James Balsillie expanded the BlackBerry's appeal to consumers through models such as the $99 Curve and Pearl.

Research In Motion fell $18.88, or 13 percent, to $123.46 at 4 p.m. New York time on the Nasdaq Stock Market, the biggest fall since July 2001.

Profit Doubles

First-quarter net income more than doubled to $482.5 million, or 84 cents a share, the company said yesterday. Sales also more than doubled, to $2.24 billion.

Analysts had predicted earnings of 85 cents a share on sales of $2.27 billion, according to the Bloomberg survey.

Consumers accounted for about 60 percent of new subscribers last quarter and now make up more than 40 percent of customers, Balsillie, 47, said yesterday on a conference call with analysts. The company, which now has more than 16 million subscribers, will increase product development spending and marketing as it prepares for product introductions in the second half, he said.

The company will face fresh competition for consumer sales next month with the introduction of a faster version of the iPhone that costs $199. The device incorporates the music and video features of Apple's iPod and runs on high-speed third- generation, or 3G, wireless networks.

BlackBerry Bold

Research In Motion's profit forecast suggests that the BlackBerry Bold, its response to the new iPhone, will go on sale later than the company planned, said Global Crown Capital analyst Pablo Perez-Fernandez in San Francisco. The company unveiled the device last month and said it will be available in the U.S. this summer for $300 to $400.

``Our fears about the Bold being late are probably true and that's why the stock is down,'' said Perez-Fernandez, who recommends buying the shares and doesn't own any.

The Bold will start ``ramping'' in the quarter ending in November, Edel Ebbs, a company vice president, said on the call.

Research In Motion added 2.3 million users last quarter, compared with the 2.2 million estimate of UBS AG analyst Maynard Um in New York.

Second-quarter sales will probably be between $2.55 billion and $2.65 billion, the company said. That compares with the $2.45 billion estimated by analysts. Research In Motion predicted subscriber additions of about 2.6 million, compared with Um's estimate of 2.47 million.

To contact the reporters on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net; Whitney Kisling in Washington at wkisling@bloomberg.net

Last Updated: June 26, 2008 16:31 EDT