RIM beats expectations on strong BlackBerry sales

BlackBerry maker Research In Motion saw strong smartphone sales in its fiscal third quarter of 2010.

Updated 3:01 p.m. PDT with information from the conference call.

On the day that Research In Motion suffered another nationwide mobile e-mail outage, it announced it beat analyst expectations in the fiscal third quarter of 2009 with strong sales of its BlackBerry smartphones.

BlackBerry Bold Research In Motion

The company's earnings were up 59 percent compared to the same quarter a year ago. For the period that ended November 30, the company reported earnings of $628.4 million, or $1.10 per share, compared to $396.3 million, or 69 cents a share, for the fiscal third quarter last year.

Analysts had expected the company to report earnings of $1.04 per share on revenue around $3.78 billion.

The company said it shipped 10.1 million smartphones during the quarter. And it added about 4.4 million new subscribers. Analysts were expecting shipments of 9.5 million with 4.1 million new subscribers.

Some industry watchers have wondered if the new Motorola Droid that uses Google's Android operating system would hurt BlackBerry sales. The Droid is one of two Android devices being sold for Verizon Wireless, and it is the closest competitor offered on Verizon's network to the Apple iPhone, which is sold exclusively in the U.S. for AT&T's wireless network.

Strong sales on RIM's part indicate that the Droid and other Android devices introduced during RIM's fiscal third quarter did not present a major threat to the smartphone maker.

Still, Verizon is spending more money marketing the Droid than it has on any other phone that it has sold on its network. But RIM's co-CEO Jim Balsillie said that Verizon continues to be an important strategic partner. And he said that the market is growing so fast that there is enough business to go around.

"The proportion of smartphones to the total market is crossing 50 percent," he said. "And we see that going to 100 percent. It's just a question of when. The overall market is growing for smartphones and we have a very important place to play in that."

But he admitted that RIM can't afford to rest on its laurels. The company's devices are favorites among corporate customers.

"At the end of the day, you can't force love," he said. "You have to earn it every day. There is no free ride in this. But we have a good sense of what we are doing in this quarter and we feel we create value everyday."

RIM's strong earnings report comes on the same day the company experienced a nationwide e-mail outage for consumers using its BlackBerry devices. Earlier Thursday before the company reported results, RIM confirmed that some BlackBerry customers were unable to get Web-based e-mail . Users getting e-mail through corporate servers were not affected, though, and phone service and text messaging were also not affected by the outage.

The problem seemed to affect customers across all major carrier networks, including Verizon Wireless, T-Mobile USA, and Sprint Nextel. AT&T would not comment and referred questions to RIM, but several AT&T customers in California and in other parts of the country said they had problems as well.

RIM said it has resolved the e-mail service problems, though e-mail may be slow to come back to some customers. The company is still looking into what caused the outage.

"RIM has isolated and resolved the issue that was impacting some BlackBerry customers earlier this morning," a company spokeswoman said in an e-mail. "Some customers may still experience delays as e-mail queues are processed. RIM is continuing to investigate the cause of the issue and apologizes for any inconvenience."

 

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