View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
April 6, 2005

Research in Motion: hardware dependence mars stellar top line growth

RIM's [RIM.TO] 2005 figures have disappointed some in the financial markets on account of the Q4 charge it took from an out-of-court settlement with developer NTP over patent infringement. While others rejoiced at the huge jump in annual revenue, topping $1 billion for the first time, its stock still ended down 6%, presumably because the market felt it underperformed at the bottom line.

By CBR Staff Writer

Canadian push email heavyweight Research In Motion enjoyed a 127% growth in 2005 revenue.

A bit unfair, really, in that the deal with NTP avoided any interruption to its business in the world’s biggest market, the US. Furthermore, if the trend for new sales of the BlackBerry handset continue (470,000 sold in the last fiscal quarter), RIM should indeed achieve its target of three million subscribers to its push email service during this fiscal year (it was 2.51 million at the end of February).

In the light of this performance, it may seem like carping criticism to point out that the percentage of revenue derived from sales of the hardware last year, 66%, was identical to the figure for fiscal 2004, even though the company has stated its aim of increasing revenue from software licensing. That did in fact grow to 14% last fiscal year, up from 8% in the previous 12 months, and of course, as that was a percentage of a much larger number, in absolute terms it was actually quite a healthy increase.

In short, the RIM figures show the company is still dependent on hardware for the bulk of its revenue, but it is gradually increasing its software revenues in the background. Since there does not currently appear to be any sign of BlackBerry fever subsiding, and since it plans to introduce the service with a bunch of new operators in countries that are still BlackBerry-less, it would seem that, for the time being, it is still on a firm growth course.

Even so, watch out for more software licensing deals to see whether RIM is delivering on its promises in that area. RIM’s stated goal is, in the medium term, to become a mobile middleware player, being the conduit through which other applications besides email will reach mobile devices. Of course, Microsoft, Symbian and even PalmSource have similar ambitions…

Content from our partners
Scan and deliver
GenAI cybersecurity: "A super-human analyst, with a brain the size of a planet."
Cloud, AI, and cyber security – highlights from DTX Manchester

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.