RIM adding more BlackBerry customers than expected

The BlackBerry is still a hit with the business community despite recent network troubles, and the holiday shopping season was kind to Research In Motion as well.

Smartphone customers keep flocking to the BlackBerry, and there are signs that it's not just harried executives signing up for service.

Research In Motion announced Thursday that it expects to have added 15 percent to 20 percent more subscribers than it initially forecast for its fourth fiscal quarter, which ends next week. The company originally thought it would add a net total of 1.82 million subscribers during the period, but strong holiday sales and the absence of a usual seasonal drop-off are credited with the surge.

Long the smartphone of choice for the U.S. businessperson, the BlackBerry is making inroads into the consumer market, and overseas as well. According to Canalys, RIM is the second largest smartphone vendor in the world behind Nokia, having more than doubled shipments of BlackBerrys from the fourth quarter of 2006 to the same period last year. In this country, it has 41 percent of the "smart converged device" market, which isn't exactly a standard term but generally means a phone capable of more than basic texting and browsing.

RIM noted that the increased amount of subscribers didn't change its financial guidance for the quarter, which is somewhat interesting. Reuters quoted analysts from UBS who think that means RIM anticipated the surge and built inventory ahead of the period, burning through it as the quarter evolved. It's also important to note that subscribers includes people who don't necessarily buy a BlackBerry handheld, but run the BlackBerry software on other phones.

Perhaps more interesting, however, will be the response of RIM's current customers and potential customers to the widespread network outage of last week. The BlackBerry service works remarkably well most of the time, but has a crucial Achilles heel in the form of RIM's network-operations center.

If the company has problems there, like it did earlier this month, e-mail to something like 85 percent of the lawyers in the U.S. gets screwed up. In a way, maybe that's not a terrible thing for the rest of us, but it's not good for RIM, and rivals are starting to use that against the BlackBerry.

To keep this train rolling, RIM will have to make sure it continues to upgrade its infrastructure in step with its subscriber additions, keep up with the cutting-edge of hardware design, and continue to improve the BlackBerry software. Nokia, Samsung, and Apple don't have to worry about maintaining the Internet.

About the author

    Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.

     

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