Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home IT Management
    • IT Management
    • Mobile
    • Networking

    RIM Is Strong, but Should BlackBerry Fear Palm’s Pre?

    By
    Michelle Maisto
    -
    April 4, 2009
    Share
    Facebook
    Twitter
    Linkedin

      Research in Motion saw profits of $3.46 billion for the fourth quarter of fiscal year 2009, the BlackBerry maker’s very pleased co-CEO Jim Balsillie announced April 2.

      The company’s quarter ended Feb. 28, and RIM’s revenue shot up from $2.78 billion the previous quarter – which was an impressive 84 percent increase from the $1.88 billion in the fourth quarter of 2008.

      Approximately 83 percent of the newly announced revenue came from devices, 12 percent from services, 2 percent from software and another 3 percent from “other revenue.”

      “RIM experienced an extraordinary year in fiscal 2009, shipping our 50-millionth BlackBerry smartphone and generating $11 billion in revenue,” said Balsillie.

      RIM’s overall revenue for fiscal year 2008 was $6 billion, with gross margins 51.3 percent; in 2009, while revenue rose considerably, gross margins fell to 46.1.

      Balsillie says gross margins in the current quarter will be in the 43 to 44 percent range, partly due to a decrease in BlackBerry component costs; while RIM manufacturers many of its devices near its headquarters in Waterloo, Ontario, it’s expected to send some of the work to Hon Hai Precision Industry in Taiwan, which also manufactures the iPhone for Apple.

      “RIM does a better job than most of managing its production costs, and we think RIM should be able to hold its gross margins broadly around current levels in the near-term,” Neil Mawston, a director with Strategy Analytics’ Global Wireless Practice, told eWEEK.

      “The longer-term threat is that R&D spending may have to go up as RIM’s portfolio expands, while its average handset price will inevitably come down as it pushes toward the mid-range mass-market,” Mawston added. “If cost-growth outstrips revenue-growth, then RIM’s profits will shrink.”

      During a call with analysts, RIM’s Balsillie had noted, “Pricing is a big function of what is at play. [Going forward] you’ll see more powerful segmenting and more powerful options.”

      Mawston says that RIM has indeed been quietly expanding its handset and services portfolios into the consumer market for the past couple of years.

      “First, RIM offered more consumer-friendly handset designs with smaller keyboards, such as the Pearl 8110,” said Mawston “Second, RIM offered more consumer-friendly services beyond corporate e-mail, such as BlackBerry Media Sync for music. Third, RIM is partnering with operators such as Orange to drive devices like the Pearl down into the mass-market prepaid segment in Europe, Africa and Asia.”

      In some ways, RIM’s plans are mirror opposite of what Apple did with the iPhone.
      “RIM has the opposite challenge to Apple,” said Mawston. “Apple started in consumer and wants to push into the enterprise. RIM started with the enterprise and wants to push into consumer. Repositioning for both of those brands will take time and resources.”

      Some of that R&D may be in service of competing against the Palm Pre, due out this June – though some say it’s no contest.

      Though Mawston says there’s more than just the Palm Pre standing between RIM and expanding 2010 revenues.

      “RIM is and will be competing on several fronts in the USA in 2010,” said Mawston. “The Palm Pre is one major competitive threat, while Apple, Samsung, LG and HTC are others.”

      That list should also include Nokia, which is quietly preparing to re-attack the U.S. market over the next couple of years.

      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×