RIM chief upbeat on subscriber surge

Research in Motion reported a surge in smartphone subscribers and revenues for the three months to 30 May, but shares in the group slid after its forecast for the current quarter fell short of recently raised analyst expectations, according to a report in the FT.

The BlackBerry handset maker added 3.8 million net new subscriber accounts, 65% above the same quarter of last year, to drive a 53% year on year jump in revenues to $3.42 billion and adjusted net income of 98 cents exceeded a 92 cent consensus forecast.

However, its shares slipped $3.55 to $73 in afterhours trading after it predicted net subscriber additions of 3.8 million to 4.1 million, sales of $3.45 billion to $3.7 billion, and earnings per share of $0.94-$1.03 for the second quarter, the FT said.

The shares had doubled since March as evidence of strong shipments offset investor concerns about the impact on corporate and consumer spending on handsets in a weak economy.

“We are starting fiscal 2010 with strong financial performance and impressive market share gains,” said Jim Balsillie, co-chief executive, citing an estimate by IDC, the IT market research group, that RIM now commands 55% of the US smartphone market.

In a conference call with analysts, Balsillie expressed little concern about the competitive threat from Apple’s new iPhone 3GS, which goes on sale in the US on Friday, or from the newly launched Palm Pre.

The smartphone market was growing, he said, highlighting the fact that four-fifths of RIM’s new BlackBerry subscribers in the quarter came from the consumer market where Apple and Palm compete most directly, The FT stated.

“I think we’ve demonstrated a lot of strength in the last two quarters, and I’m not seeing anyone take their foot off the gas,” Balsillie said.
The RIM chief said he was “especially excited” about prospects for the second half of the year and about its line-up for 2010. He added, however, that the launch of the BlackBerry Tour model would also help offset the seasonal weakness. RIM shipped 7.8 million devices in the first quarter, in which its total subscriber base rose to about 28.5 million.