During the quarter, RIM launched its 8800 enterprise BlackBerry and its 8830 World Edition, which works on US networks and those abroad. This helped drive subscriber accounts up by about 1.2 million during the quarter, to more than 9 million. Waterloo, Ontario-based RIM said it would ship its 20 millionth handset this summer.
RIM also is readying a new lineup of BlackBerry devices for the summer, said chief executive Jim Balsillie, on a conference call yesterday with analysts.
He said there would be some incredibly powerful launches this summer. I can’t really tip our hat to it but there will be a couple that people won’t see coming.
A UMTS, or universal mobile telecommunications system, device is likely among its forthcoming offerings, but it wouldn’t ship until winter, Balsillie said, when pressed for details on the new portfolio.
RIM revenue rose to $1.08bn for the quarter, which ended June 2. This helped drive profit to $128.8m, or 67 cents a share. The company also announced a 3-for-1 stock split yesterday. The company projected revenue of between $1.3bn and $1.4bn for its current, second fiscal quarter.
The company said it saw strong growth in Southern Europe and Latin America for its products, but that North America and Western Europe continued to drive the bulk of sales. Balsillie said the company’s sales channels worldwide were experiencing strong growth.
We’re hard pressed to find a channel that’s not firing on just about all cylinders, he said. We’re at the early innings of a big game right here.
During the quarter, the company also claimed success in tapping into the consumer market for its BlackBerry device, with its newly launched consumer Curve device that has a sophisticated music and video player.
About 29% of RIM’s subscribers in the recent quarter were consumers or small-business users who subscribe to its BlackBerry online service. However, industry watchers have warned this service will soon compete with Apple’s iPhone smartphone, which goes on sale in the US today in two models priced at $499 and $599.
Balsillie shrugged off the potential iPhone threat. I think [Apple] did us a great favor, because they drove attention to the converged appliance space and, in particular, that you should expect media on your smart phone, which we’ve built a leadership in, he said. [The iPhone’s] impact on the [market] dynamic has, quite frankly, been overwhelmingly positive to our business.
He also noted the iPhone was launching with a single carrier, AT&T, and only in the US, while the BlackBerry sells in about 100 countries and through about 300 carriers. The other dynamic is with one carrier – and the US has multiple carriers – that creates a bit of a response dynamic I would think, Balsillie said.
Our View
It’s reasonable to expect the iPhone will put a crimp in RIM’s consumer business, but it remains to be seen by to what degree. In the short term, likely not very much.
It’s worth bearing in mind that a little more than 70% of RIM’s business is enterprise driven, so whatever damage the iPhone may do to RIM’s consumer segment, the company likely will continue its steady enterprise growth. The iPhone, after all, is very clearly a prosumer – and not enterprise – play.
