RIM Sees Earnings Rise Thanks To Bold, Storm - InformationWeek

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12/18/2008
07:07 PM
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RIM Sees Earnings Rise Thanks To Bold, Storm

The company said its two latest BlackBerry handsets are selling well, and it has added 2.6 million new subscribers for the third quarter.

Research In Motion was able to hit its adjusted estimates for the third quarter, and the success of the BlackBerry Bold and Storm led to $2.78 billion in revenue.

Net income for the quarter was $477.3 million, compared with $370.5 million for the same period last year. The company said it shipped about 6.7 million units, and much of the success can be attributed to two high-profile launches last month.

The BlackBerry Bold smartphone was released on AT&T after months of delays and was met with critical praise. The touch-screen BlackBerry Storm was a direct response to the success of Apple's iPhone 3G, and it was met with mixed reviews. But RIM said the device continues to have strong sales momentum, and Verizon Wireless has had trouble keeping up with demand.

"RIM launched an unprecedented number of BlackBerry smartphones in the third quarter, and these new products are being adopted at an even faster pace than we expected," said Jim Balsillie, co-CEO at RIM, in a statement. "Our industry-leading product portfolio is positioned well to capitalize on the increasing market opportunity in the fourth quarter of fiscal 2009 and beyond."

The company added about 2.6 million new subscribers in the quarter, bringing the subscriber base up to about 21 million. RIM has been able to attract more than just the mobile professional, as it said 60% of new subscribers were from nonenterprise accounts. Overall, RIM said the nonenterprise users account for nearly 45% of its entire subscriber base.

The move toward the casual market has long been expected, and the company's Storm, Pearl, and Pearl Flip are aimed more at the prosumer market than the enterprise user. The company also is emphasizing so-called "lifestyle apps" from the likes of MySpace, Facebook, TiVo, and Slacker.

While the mobile phone market as a whole is expected to contract next year because of economic uncertainty, the smartphone market is still expected to grow. RIM is still leading the U.S. market in terms of market share, but it was outsold by Apple's iPhone 3G last quarter. With a large portfolio of devices, RIM may have the advantage over Apple for the next few quarters until a new iPhone is released.

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