RIM shares surge as BlackBerry sales hit record 7.8 million
RIM announced $3.46 billion in revenue for the fourth quarter of fiscal 2009, which ended February 28. That's a 24.5 percent increase from the previous quarter of $2.78 billion, and up 84 percent year-over-year. The company also said it signed up 3.9 million net subscribers who are new to the BlackBerry platform during the quarter.
The results were slightly better than Wall Street's estimates, which had dropped significantly with the February warning. Much like Apple, RIM is doing well enough in comparison with its peers that even meeting expectations is cause for celebration in the current economic conditions.
"We are very pleased to report another record quarter with standout subscriber growth that speaks volumes about the early success and momentum of our new BlackBerry products," said co-chief executive Jim Balsillie. "RIM experienced an extraordinary year in fiscal 2009, shipping our 50 millionth BlackBerry smartphone and generating $11 billion in revenue."
Revenue for RIM's entire fiscal year was $11.07 billion, up 84 percent from $6.01 billion in fiscal 2008. The Canadian company reported $518.3 million in net income for the quarter ($0.90 per diluted share) compared with $396.3 million ($0.69) for the previous quarter. A year ago the BlackBerry manufacturer reported $412.5 million, or $0.72 per share, in the same quarter.
Quarterly gross margin was 40%. The company is estimating revenue for the first quarter of fiscal 2010, ending May 30, 2009, in the range of $3.3 to $3.5 billion while adding 3.7 to 3.9 million new subscriber accounts. RIM says the fourth quarter's revenue breaks down to 83 percent for devices, 12 percent for service, two percent for software and three percent for other revenue.
Apple iPhone vs. BlackBerry
Despite the economy and competitors such as Apple's iPhone, RIM shipped a record 7.8 million devices, besting its previous high of 6.7 million in the third quarter.
Not taken by Storm
RIM does not break out sales figures for its individual devices, such as the BlackBerry Storm, its touchscreen competitor to the iPhone. However, company leaders claimed the Storm was driving "record levels" of new subscribers according to a MarketWatch report.
Verizon Wireless, the exclusive source for the Storm, heavily promoted the new model in advertising that clearly alluded to the success of the iPhone. Many loyal BlackBerry users have been less than pleased with the new model however, which sacrifices the messaging savvy that the BlackBerry brand is known for to simply offer an alternative product that looks more like an iPhone. Popular Mechanics even called it the "anti-BlackBerry" for lacking the keyboard, simplicity and speed users expected of a RIM product.
The Storm was also ravaged by reviewers over a series of hardware problems, a sluggish user interface, and its lack of Wi-Fi wireless networking, an omission pushed by Verizon to keep subscribers tied to the company for all their network access. The Wall Street Journal described it as a "bumpy start," with estimated quarterly launch sales of just half a million, a fifth of the iPhone 3G units AT&T sold, and well below a tenth of the 6.8 million units Apple sold worldwide in its launch quarter.
RIM has taken steps to weather the unpleasant launch of the Storm in a tough economic climate; Balsillie gave credit for the company's gains to its recent focus on lowering operating expenses and increasing efficiency in order to keep build costs low. He said that carrier inventory "is at the lowest levels we have seen for some time" due to the slowing economy, adding that mobile phone service operators have been slow to replenish inventory.