RIM Q3 Results Better Than Feared, Ahead Of BB10 Launch

Research In Motion has posted better than expected third quarter results, yet the BlackBerry maker will be hoping for improvement when its BlackBerry 10 platform launches on 30 January.

RIM is counting on the new mobile platform and the smartphones that will launch with it to save the company and bring back users who have abandoned their BlackBerrys for iPhones and Android devices.

Decline Slowdown?

Still, the quarter wasn’t as cringe-worthy as Wall Street was braced for.

RIM recorded revenue of $2.7 billion (£1.6bn) – down 5 percent from the quarter before and 47 percent from a year ago, suggesting the worst of the bleeding has been staunched. It sold 255,000 PlayBooks, up from 130,000 last quarter, and 6.9 million BlackBerry smartphones. This was down from the 7.4 million smartphones sold last quarter and from the 14.1 million sold a year ago, but it was still a considerable achievement, given that RIM’s current handsets won’t be able to upgrade to the BlackBerry 10 platform.

After tax-related adjustments, RIM reported a loss of 22 cents a share – far better than the 35 cents investors expected.

Gartner VP Distinguished Analyst Ken Dulaney called the quarter “irrelevant,” though he told eWEEK that if he focused on anything it was the subscribers RIM lost.

RIM’s base fell to approximately 79 million, from the 80 million RIM celebrated last quarter. These subscribers, RIM CEO Thorsten Heins said during the 20 December earnings call, were mostly from North America. Subscriber figures were stable or grew in other parts of the world. But North American subscribers are the ones RIM needs most.

RIM’s future success, said Dulaney, is “predicated on whether they can get users [in developed markets] excited. RIM’s in fourth place, and that’s a tough place to be.”

Heins preferred to focus on RIM’s cash flow, which was $950 million (£585m), as well as what a “dynamic time” it currently is at RIM.

“Excitement for BlackBerry 10 is high throughout the entire organisation,” Heins said during the call. “I’d describe the excitement as employees are wearing a badge of honour right now. … It’s a great time to be with BlackBerry.”

On 17 December RIM launched an invitation-only beta program, which enlisted 120 enterprises to preview BlackBerry 10. That figure, said Heins, is now at more than 150.

Carriers Impressed

Heins and his executive team recently returned from an extensive, worldwide carrier roadshow, where he said enthusiasm for BlackBerry 10 is also high.

“The carriers are placing pricing orders with us way ahead [of launch] and to us that’s a very good sign,” Heins said with a little laugh. He added that the carriers are eager to be early to market with the devices. (Gartner’s Dulaney likened the carriers to department stores, saying they need to have an assortment of goods on the shelves.)

Rumours have persisted that the ailing RIM may soon be sold off in pieces, or bought outright, and Heins said RIM continues to “meet with potential partners about how we might extend each others’ strengths.”

He also said that he’d like to eventually generate service revenue from BlackBerry Messenger, and that RIM plans to move to a new payment structure. When asked for clarity on the details – such as whether fees would stay the same for BlackBerry 7 users who don’t upgrade or whether fees would be paid by the user rather than the carrier? – listeners were told that RIM “isn’t providing details on [the new structure] yet.”

Heins concluded his statements by saying that RIM has “an unbelievable fan base that’s excited … and RIM knows they demand and respond to innovation. We believe BlackBerry 10 will deliver on that.

Will BlackBerry 10, in fact, save the day?

After 30 January, said Gartner’s Dulaney, “The next six months will determine that.”

What do you know about BlackBerrys? Find out with our quiz!

Originally published on eWeek.

Michelle Maisto

Michelle Maisto covers mobile devices, Android and Apple for eWEEK and is also a food writer.

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