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Friday, December 18, 2009, 09:45 am PT (12:45 pm ET)

Research in Motion sells record 10M BlackBerries in Q3 [u]

Apple competitor Research in Motion had a blockbuster quarter, selling 10.1 million handsets and earning $3.92 billion in revenue in the three-month frame ending in November.

RIM's total revenue for its third quarter of fiscal 2010 was up 11 percent from the previous frame, and 41 percent year-over-year. Most of the company's revenue — 82 percent — came from devices, while 14 percent came from service, 2 percent software, and 2 percent other revenue. Net income for the quarter was $628.4 million, or $1.10 per diluted share, well up from the $396.3 million earned a year prior.

"We are pleased to report record shipments of more than 10 million BlackBerry smartphones during the third quarter with higher than expected revenue, earnings and subscriber growth," said Jim Balsillie, Co-CEO at Research In Motion.

"RIM is experiencing a great start to the holiday buying season and the strong Q3 results and Q4 outlook clearly reflect the strength of our diversified product portfolio as well as the success of our efforts to expand into broader customer segments and new geographies while maintaining our strong position in North America."

BlackBerry gained 4.4 million subscriber accounts during the three-month period. Currently, there are about 36 million total subscribers.

For comparison to RIM's record 10.1 million BlackBerry sales, Apple in its last financial quarter sold a record 7.4 million iPhones. Some analysts believe Apple could also crack the 10 million barrier in the December quarter.

However, RIM's quarters are offset a month from Apple, so there are never true direct comparisons for unit shipments. Next month Apple will reports its next quarterly results for the frame ending in December. But RIM's December totals will not be reported for another three months.

This week, a new survey from research firm comScore found that handsets from both RIM and Apple have grown exponentially in market share since February. As of October, RIM was said to have nearly 15 million devices in the U.S. market, while Apple has grown steadily to nearly 9 million.

Update: Analysts were positive in reaction to this week's earnings report. Shaw Wu with Kaufman Bros. reiterated his "buy" rating for RIMM stock.

"Our long-standing view is that Apple remains RIM's only true competitor, but we believe there is plenty of room for both to succeed," Wu said in a note to investors. "Combined, we estimate RIM and Apple have only 5%-6% share of the total global cell phone market."

Mike Abramsky of RBC Capital Markets noted that the company issued "knockout" guidance for its fourth quarter, with an outlook of $4.2 billion to $4.4 billion in revenue.

He noted that the possibility of an iPhone debut with Verizon in 2010 has helped to keep the value of shares down. But RBC Capital Markets has estimated that a Verizon iPhone would reduce BlackBerry sales on the carrier by just 4 percent of its 60 million estimated sales for calendar year 2011.

And analyst Robert Cihra with Caris & Company alluded to Apple at the start of his note: "Guess there's room for more than one good smartphone." He expects Android, BlackBerry and the iPhone to all grow. RIM's share is predicted to expand from 3 percent this year to 4 percent in 2011. The losers will be "legacy voice-centric incumbents," Cihra said.

"We think macro smartphone tailwinds offer more than enough market opportunity to sustain BlackBerry growth, which still accounts for just ~3% of all cell phones (similar to iPhone)," he wrote, "and ultimate remains one of just a handful of viable software platform contenders for share in a smartphone pie we see growing +30% to >220mm units in 2010."