Research In Motion Ltd. shipped a record number of BlackBerry smart phones in the fiscal first quarter and reported profit that beat Bay Street's expectations, but its revenue fell below the company's own forecasts.
On Thursday, RIM reported earnings of $768.9-million (U.S.) or $1.38 per diluted share in the three months ended May 29, compared with $643-million or $1.12 per share the previous year.
Revenue was $4.24-billion, up 24 per cent from the previous year. RIM shares were down 4.6 per cent in after-hours trading to $55.90.
The Waterloo, Ont.-based company is facing tougher competition in the smart phone market from technology giant Apple Inc. - which announced it took in a record 600,000 advance orders for its new version of the iPhone, unveiled earlier this month - and Google Inc.'s Android mobile phone platform. The iPhone 4 hit store shelves around the world on Thursday.
RIM co-chief executive officer Jim Balsillie said the company will be launching a new operating system referred to as BlackBerry 6, before the end of September. A revamped version of its App World store is also on the way, along with two new devices this summer.
"Once you see the new app world and the new platform, you'll all be really surprised," Mr. Balsillie told analysts on a conference call Thursday.
Mr. Balsillie said that in addition to customer upgrades, the future for smart phones lies with users who want to use their mobile devices to consume media. He said the company is focusing on innovating to accommodate rich media.
That kind of innovation is needed, according to Pierre Ferragu, an analyst with Sanford C. Bernstein Ltd. "The centre of gravity of the smart phone experience has moved away from e-mail and closer to browsing and multimedia sharing," he wrote in a research note last week.
However, Ronald Gruia, a telecom analyst with Frost & Sullivan in Toronto, emphasized the potential in recent device releases more than those coming down the line. The recently released third-generation Pearl, for example, should help in global markets that have been crucial for the company.
"Historically, the Pearl sold tremendously well on a global basis. It put BlackBerry devices in consumer hands like never before," he said. "That's going to be important ... overseas strength is going to drive growth."
In the first quarter, RIM shipped a record 11.2 million devices, including the 100 millionth BlackBerry. It also added 4.9 million subscribers, bringing its global subscriber base to roughly 46 million, about 40 per cent of them outside North America.
In the current quarter, RIM said it expects to add another 4.9 million to 5.2 million subscribers, and to bring in revenue between $4.4-billion and $4.6-billion.
Among the devices RIM is set to launch is a rumoured phone with the kind of touch screen technology the iPhone is famous for, as well as a pullout keyboard. Rumours have also swirled about a tablet to compete with Apple's iPad, but Mr. Balsillie would not discuss details.
"I just wish I could wind the clock forward a few weeks," he told analysts. "I can't say much more, but I couldn't feel better."