Launch of iPhone Helps Drive Blackberry Profits
Canadian firm Research in Motion Ltd. (RIM), maker of the popular Blackberry smart phone, saw its profits more than double last quarter, driven in part by the successful introduction in June of rival Apple Inc.’s iPhone.
RIM, based in Waterloo, Ontario, reported earnings of $412.5 million during its fourth quarter ending March 1, or 72 cents per share. The results exceeded analyst estimates of 70 cents per share, and were a sharp increase over the same period last year when earnings were $187.4 million, or 33 cents per share. Revenue also increased to $1.88 billion from $930 million, exceeding estimates of $1.86 billion.
According to Canaccord Adams analyst Peter Misek, the iPhone’s launch brought more attention to smart phones in general, benefiting not only Apple, but also its competitor RIM.
“People are starting to realize, ‘Why should I buy a Razr when I can buy a BlackBerry or an iPhone?’ I think the iPhone was the single biggest blessing RIM ever had,” Misek told the Associated Press.
The company has been a leader in the enterprise market for years, and RIM is now targeting consumers with push e-mail software for real-time email access through their Blackberrys.
“It’s much more of a mainstream thing,” Jim Balsillie, the company’s co-CEO, said during a conference call with analysts.
Balsillie said RIM hasn’t seen a negative impact on business because of the slowing U.S economy. In fact, the company added 2.2 million new subscribers during the quarter, shipping about 4.4 million smart phones and bringing its total to more than 14 million.
Apple Inc. said it has sold 4 million smart phones since the iPhone’s launch, having sold 2.3 million devices in the quarter ending Dec. 29.
Many people consider Blackberry smart phones easier to use for e-mail and text-messaging than the iPhone because they have traditional keypads instead of touchscreens. Also, BlackBerrys cost less than iPhones.
RIM said it expects between 82 cents and 86 cents earnings per share during the first quarter of its fiscal 2009, exceeding analysts expectations of 76 cents.
Duncan Stewart, president of Duncan Stewart Asset Management, said he is amazed a company the size of RIM has doubled its revenue, calling the firm recession-proof.
“People may be spending less money on cars, they be spending less money on their houses, but it turns out the BlackBerry is the one essential,” Stewart told the Associated Press.
U.S.-traded RIM shares rose $5.46, almost 5 percent, to $121.25 in after-hours trading Wednesday after closing at $115.79.
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