Research in Motion sells record 10M BlackBerries in 3Q

Posted:
in iPhone edited January 2014
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."
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Comments

  • Reply 1 of 43
    RIMM ASP are lower than iPhone's and so are margins. Meanwhile, YOY growth of the iPhone has exceeded RIMM. I would expect the sequential growth to do well. More like 40% and closer to 11M based on the stats published on AI.
  • Reply 2 of 43
    The iPhone is the best thing to have happened to RIM. Already dominant in the smartphone space, RIM had little room to grow. Apple comes along and makes the smartphone "for the rest of us," thus expanding the market overall. RIM begins to grow again as more non-business types start buying smartphones. Good for both.
  • Reply 3 of 43
    Quote:
    Originally Posted by Robin Huber View Post


    The iPhone is the best thing to have happened to RIM. Already dominant in the smartphone space, RIM had little room to grow. Apple comes along and makes the smartphone "for the rest of us," thus expanding the market overall. RIM begins to grow again as more non-business types start buying smartphones. Good for both.



    better devices sell more... where's the news here?
  • Reply 4 of 43
    tenobelltenobell Posts: 7,014member
    The lower ASP is because RIM has pushed its sales with buy one get one free deals, which Apple does not do.



    Quote:
    Originally Posted by AjitMD View Post


    RIMM ASP are lower than iPhone's and so are margins. Meanwhile, YOY growth of the iPhone has exceeded RIMM. I would expect the sequential growth to do well. More like 40% and closer to 11M based on the stats published on AI.



  • Reply 5 of 43
    al_bundyal_bundy Posts: 1,525member
    10 million phones "sold" but only 4.4 million activated? where are the rest? ebay? garbage?
  • Reply 6 of 43
    How many of these 10 million are attributable to the "Buy 1 Get 1 Free" offer?
  • Reply 7 of 43
    Quote:
    Originally Posted by al_bundy View Post


    10 million phones "sold" but only 4.4 million activated? where are the rest? ebay? garbage?



    The article said they "gained 4.4 million," implying that the rest were probably older customers getting new Blackberries.
  • Reply 8 of 43
    lilgto64lilgto64 Posts: 1,147member
    When are people going to stop using the term "barrier" to describe what should be called a "milestone" or a "mark" or even a "plateau" ?



    At least in the case of the "sound-barrier" there were folks who thought that the physics relative to our best technical efforts would be insurmountable. On the other hand I think there are many cases where someone decided that their was a barrier (four minute mile perhaps) before any serious effort to test that "limit"



    to me a barrier is something that actively (or passively) blocks or prevents attainment of that goal or position. Say for example the altitude at which there is insufficient oxygen to breathe - that is a barrier - because no matter what you do - you cannot breathe past that point unless you bring your own oxygen. Or the blood-brain barrier which keeps lots of stuff from passing from the blood stream into the brain (at least when it is working properly).



    A 10 million unit per quarter "barrier" would only exist if there was some factor such as manufacturing capability of the component suppliers or the number of available subscribers that was limiting the available units or the potential customers.



    In fact - by using the term "barrier" you can artificially limit people from even trying to overcome whatever the supposed limitation is. For example, for many years no looked for the bacteria that causes stomach ulcers because someone decided that bacteria cannot survive in the acid environment of the stomach - so no one bothered to look - and when someone finally did it took about 10 years for anyone to believe him.



    So the only "barrier" that I can think of to 10 million iPhone unit sales is historical data that says it has not happened yet - but I would think that same historical data ought to lend itself to an extrapolation that would suggest when that 10 million unit mark would be achieved. Even if the iPhone never sells 10 million units in a given quarter before it is withdrawn entirely and is no longer sold would not mean that there was a "barrier"
  • Reply 9 of 43
    richlrichl Posts: 2,213member
    Quote:
    Originally Posted by AjitMD View Post


    RIMM ASP are lower than iPhone's and so are margins.



    Don't forget that RIM gets a cut of carrier revenue too. A lower ASP is balanced by steady monthly income.
  • Reply 10 of 43
    Quote:
    Originally Posted by Robin Huber View Post


    The iPhone is the best thing to have happened to RIM. Already dominant in the smartphone space, RIM had little room to grow. Apple comes along and makes the smartphone "for the rest of us," thus expanding the market overall. RIM begins to grow again as more non-business types start buying smartphones. Good for both.



    It is kind of interesting seeing the two seem to feed off each other. RIM appears to be the only one that hasn't been hurt by the iPhone in fact they appear to be doing better then ever.
  • Reply 11 of 43
    Only because the iPhone is limited to a single carrier... If iPhone would get Verizon, I think RIM's days would be numbered.
  • Reply 12 of 43
    Quote:

    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.





    Uh, this should have been Apple's 10.1 million handsets sold, but then Apple doesn't cater to the business market, only consumers.



    Apple just wants to make a limited line of consumer products, that's their problem and always has been.



    Wonder why Mac's are ignored in business? Now you know.





    Apple could take over Windows in business, MS Office would just be a priority on Mac's instead of PC's that's all.
  • Reply 13 of 43
    Quote:
    Originally Posted by chrisk View Post


    How many of these 10 million are attributable to the "Buy 1 Get 1 Free" offer?



    Who knows? But if a marketing model works, it works. As much sh*t as we give RIM for their sales being driven by Verizon's BOGO deal, it's clearly a successful marketing technique. The numbers here show it.



    I'm surprised that AT&T and Apple haven't tried something similar. Sure, they don't need to. But could you imagine the influx of new customers if they did that?
  • Reply 14 of 43
    Quote:
    Originally Posted by lilgto64 View Post


    When are people going to stop using the term "barrier" to describe what should be called a "milestone" or a "mark" or even a "plateau" ?



    Not that I'm telling you anything you don't already know, but this sort of misapplication of terms is extremely common. It's similar to the automatic use of the term "Apple faithful" by many in the media to describe Apple's customers, apparently without giving a thought to what that actually implies. Anyway, few will care, but you get points from me for noticing.
  • Reply 15 of 43
    Quote:
    Originally Posted by AsianBob View Post


    Who knows? But if a marketing model works, it works. As much sh*t as we give RIM for their sales being driven by Verizon's BOGO deal, it's clearly a successful marketing technique. The numbers here show it.



    I'm surprised that AT&T and Apple haven't tried something similar. Sure, they don't need to. But could you imagine the influx of new customers if they did that?



    Apple kind of sale would be, buy one get the second at only 600% markup....
  • Reply 16 of 43
    Wow.....expect apples market share to go down. Now all we need is a new iphone......
  • Reply 17 of 43
    Wait for Apple to post its numbers for the quarter. THAT will be impressive.



    Apple will still surpass RIM's share. It's going to happen.
  • Reply 18 of 43
    Quote:
    Originally Posted by Quadra 610 View Post


    Wait for Apple to post its numbers for the quarter. THAT will be impressive.



    Apple will still surpass RIM's share. It's going to happen.



    I could if Apple and Verizon do make a deal. If ATT decides to cap data and Apple goes with TMobile then no way they will surpass RIM. News like this proves that the carrier makes the phone not the other way around.
  • Reply 19 of 43
    trumptmantrumptman Posts: 16,452member
    Apple is doing well but they are sort of fighting RIM with one arm tied behind their back due to their own self-limiting behavior. RIM sells a touch screen model (Storm2) and also clamshell, straight keyboard, etc. They sell on AT&T, Verizon, T-mobile, Sprint and around the world as well.



    Since all data goes through RIM servers, it can be compressed to help deal with the load on carrier bandwidth.



    In short they manage to do well by doing everything Apple can't and won't.



    That doesn't mean Apple needs to change, but they do need to realize that when they won't fill a space, someone else will. Imagine how much more difficult the MP3 market would be if Apple only sold the iPod Touch and no Mini, Nano or Classic.



    One size doesn't fit all. That shouldn't be a surprise.
  • Reply 20 of 43
    http://www.reuters.com/article/idUSTRE5BH3AI20091218



    BlackBerry-maker Research In Motion fails to dispel doubts



    "BlackBerry maker Research In Motion may have zipped past expectations for its quarterly results and forecast, but it hasn't dispelled all doubts about its staying power to lead the race," Susan Taylor and Ritsuko Ando report for Reuters. "Even as RIM's stock jumped 10 percent on Friday, analysts were questioning the company's ability to maintain profit margins as it battles for market share with rival products, such as Apple's iPhone."



    RIM shipped a record-breaking 10.1 million phones in the third quarter and expects to ship 10.6-11.2 million phones in the current quarter at an average selling price of $320. But strong international sales masked a string of structural weaknesses, said Sanford C. Bernstein analyst Pierre Ferragu."



    "Charter Equity Research analyst Ed Snyder thinks Waterloo, Ontario-based RIM is still behind the curve. He said the BlackBerry maker will face 'a difficult period ahead as it reaches further down the value chain to fuel its growth,'" Taylor and Ando report. "RIM has cornered the corporate market, but it has not yet launched a touchscreen, media-centric phone that captures consumer imagination, he said."




    Buy One, Get One Free, will only get you so far. It helps with # of units shipped, but Apple stil has yet to report the result of their holiday quarter. And RIM's Storm devices are hardly designed to serve the user. The writing is on the wall and RIM needs to start pulling rabbits out of hats. Nice numbers, but the story behind the story isn't too promising.
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