Consumer BlackBerry Sales Boost RIM's Revenue to $3.42 Billion

 
 
By Michelle Maisto  |  Posted 2009-06-18
 
 
 

With great pleasure, Research In Motion announced its first-quarter results for fiscal year 2010 on June 18. RIM saw revenue of $3.42 billion-a 53 percent increase from the first quarter of the previous year-and shipped approximately 7.8 million devices, it said.
 
RIM was coming off a strong fourth quarter, in which it saw revenue of $3.46 billion and announced it had shipped its 50 millionth BlackBerry smartphone, and analysts were expecting another strong performance.
 
RIM reported that devices accounted for 81 percent of its revenue, followed by 13 percent for service, 2 percent for software and 4 percent for "other revenue."
 
"We are starting fiscal 2010 with strong financial performance and impressive market share gains, including a 55 percent share of the U.S. smartphone market, according to IDC's latest estimate," said Jim Balsillie, co-CEO of RIM.
 
Balsillie said during the quarter RIM introduced a number of new products including the BlackBerry Enterprise Server 5.0 and the BlackBerry Tour smartphone, hosted its Eighth Annual Wireless Enterprise Symposium and "made dramatic progress in the penetration of new market segments."

For the future, he added, "We have a number of new products planned, as well as new opportunities."
 
In the first quarter, RIM added 3.8 million net new BlackBerry subscriber accounts-up 65 percent from the same quarter last year-bringing the total number of BlackBerry subscriber accounts to approximately 28.5 million.
 
Analysts have highlighted RIM's desire to appeal to consumers in addition to enterprise customers, just as Apple, which has a large consumer base, is courting the enterprise.
 
"The subscriber base has grown steadily over the last couple of quarters, and in Q1 approximately 80 percent of net new [subscriptions] came from non-enterprise customers," Balsillie said. "These customers now represent over half of the total BlackBerry subscriber account base."
 
For the quarter, income before income taxes was just shy of $7 million, and net income was just over $643 million. Expenses, which included R&D, selling, marketing, administration and amortization, totaled just over $801 million.
 
Looking forward, Balsillie additionally told investors, "While we typically see a slowdown in the summer months due to low seasonality, we expect to ship between 8.1 and 8.7 [million] BlackBerry smartphones and add between 3.8 and 4.1 [million] net new subscriber accounts in quarter two, reflecting the strong demand we see across multiple channels, new product launches that are scheduled in the quarter, and planned carrier promotions throughout the summer and into the fall."
 
He continued, "IDC recently announced their U.S. smartphone market share figures for Q1, which showed that our market share gained 8.5 points in Q1, after gaining 6.4 points in Q4. Having grown market share from roughly 40 percent to 55 percent in the past two quarters, BlackBerry now accounts for more than all the other smartphone sales in the U.S. combined, and more than double our nearest competitor."
 
Balsillie said he was additionally pleased that the analyst reports confirmed that "the BlackBerry Curve is the No. 1-selling smartphone in North America."
 
RIM also saw considerable international growth, with Balsillie emphasizing, "We are encouraged by the growth we see in many regions, especially Latin America, the Middle East and parts of Asia."
 
In a statement issued by the company, Balsillie added, "We are particularly excited about the strength of our product portfolio for fiscal 2010 and we are looking forward to driving continued growth and profitability in our business throughout the remainder of the year."

Rocket Fuel