RIM reports user base at more than 50 million

Highlights of BlackBerry makers' second-quarter earnings report include 12 million devices shipped and higher-than-expected revenue of $4.62 billion.

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Research in Motion today reported higher than expected revenue for the second quarter of the fiscal year.

The company's second-quarter outlook from June pegged revenue somewhere between $4.4 billion and $4.6 billion, but the final reported amount came in a little higher, tallying $4.62 billion. The company says that's up 9 percent from the previous quarter.

Based on the GAAP accounting standards, net income for the quarter was $796.7 million compared with $768.9 million in the first quarter.

The handset maker also said that it had shipped more than 12 million BlackBerry devices in the quarter, the most it had ever shipped in that time frame. Additionally, the company reported a net of approximately 4.5 million new BlackBerry subscriber accounts added, bringing the total reported BlackBerry user base to more than 50 million--up 56 percent year over year.

During its second fiscal quarter earnings call, RIM's co-CEO Jim Balsillie, highlighted the launch of the Torch as being the company's most successful product launch to date. The company also estimated that it would continue to do well in Q3 and Q4 with upcoming launches in Mexico, Canada, and Europe, as well as the holiday shopping season.

Balsillie also touched lightly on RIM's efforts in the Middle East, where the company had been asked by the United Arab Emirates to make concessions on its data security earlier this year.

"On the topic of lawful access, RIM is continuing discussions with governments and carriers in India and the UAE, and they believe we have made good progress in those discussions," Balsillie said. "We are willing to comply, but we cannot compromise the security." Balsillie went on to explain that the company now has 250,000 BlackBerry servers worldwide, all of which are using the company's encryption processes and were a "fundamental part of [RIM's] business."

Answering an analyst question from Scotia Capital about RIM's efforts in China, Balsillie said the company was "uniquely positioned to be a very good citizen" there, and that it had "a lot of products" in the pipeline for release in China later this year. "We have to slowly and systematically do what we do. But I think we're rather unique in that way," he said.

One of those products in the pipeline, Balsillie said, would be announced at this month's BlackBerry Developer Conference. "I can't really give you too much there, but I think you'll be really interested there. More design philosophy aspects are going to come out there." Balsillie was responding to a question from an IBC Capital analyst who had asked about RIM's design philosophy. "It's dangerous to frame all this in a high-end arms race," Balsillie said. "If you saw the road maps, and saw the engagement strategies you'd see we're being prudent on these fronts."

Other items of note were that pre-paid phones have become an increasingly important part of RIM's business both internationally as well as in North America. In the U.S. alone, Balsillie reported that Sprint's Boost, Cricket Mobile, and Virgin Mobile had been "gaining traction" during Q2, and that the pre-paid phone business "represents a substantial opportunity because it makes up a large segment of wireless users around the world."

Lastly were phone applications, which Balsillie said now top 200,000 in RIM's App World store. Of those, the company reported 1.5 million apps being downloaded every day. That's up 40 percent from the same time last quarter.

 

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