RIM posted its sixth straight quarter of record BlackBerry shipments and beat analyst expectations during its fiscal third quarter, defying critics even as competition in the smart phone market heats up.
The company's positive results are in large part due to the popularity of its newer, more consumer-focused phones, such as the recently released BlackBerry Torch - good news for RIM, as it increasingly shifts focus to competing with technology powerhouses such as Apple Inc. and Google Inc. for dominance in the growing consumer market.
"The smart-phone market is rapidly evolving, highly segmented and growing quickly," RIM co-CEO Jim Balsillie said.
The Waterloo, Ont.-based smart-phone maker said its third-quarter unit shipments and revenue both jumped 40 per cent, compared with the same period last year.
RIM posted third-quarter profit of $911.1-million (U.S.) or $1.74 a share, on revenue of $5.49-billion. Analysts had expected, on average, earnings of $1.65 on revenue of $5.4-billion, according to Thomson Reuters I/B/E/S.
RIM also forecast better-than-expected numbers for the upcoming quarter, although it is unlikely that the company's next major product, the PlayBook tablet computer, will be released in time to affect those results.
RIM's results were helped in large part by the positive uptake of its new smart phone, the Torch, which combines a traditional BlackBerry keyboard with a touch-screen interface. RIM launched the Torch in 75 more countries during the past quarter, and in many of those markets the phone benefited from aggressive marketing campaigns as many carriers begin to diversify from devices such as Apple's iPhone.
Still, despite another quarter in which RIM easily beat expectations, some analysts point out the company's competition is only going to get more intense.
"The results look pretty good. For the current quarter they definitely benefited from some new products … The guidance also looks quite strong," said Shaw Wu, of Kaufman Bros. in San Francisco.
"One of the concerns that we have … is the guidance is strong, but I think there is some concern that it could be too optimistic perhaps because of the ongoing pressure, particularly from Android [Google's operating system for mobile devices] in international markets."
According to the most recent numbers from research firm ComScore, RIM still maintains the largest share of the U.S. smart-phone market, with 35.8 per cent. However that number dropped 3.5 percentage points from July of this year, whereas phones powered by Google's Android operating system jumped 6.5 points during the same period.
But the smart-phone market itself continues to grow. Indeed, research firm Gartner predicts the market will hit one billion devices by 2013.
Analysts and investors will now turn their attention to RIM's PlayBook tablet. The first versions of the tablet are expected to land in the U.S. during the early part of 2011. The PlayBook marks RIM's first entry into a market currently dominated by Apple, and the company hopes to break the iPad's stranglehold by leveraging RIM's success in the enterprise space, for example, by allowing users to tether their tablets to their BlackBerrys.
The PlayBook launch will come at a time of intense competition in the tablet space. Not only are several companies coming out with their own products, but Apple is also expected to refresh the iPad early in 2011.
With files from Reuters