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BlackBerry produces stellar third quarter
RIM makes smart moves…

By Reuters

Published: Friday 21 December 2007

BlackBerry maker RIM yesterday reported a third quarter profit that beat expectations, sending its shares higher, even as it delivered a subscriber outlook that fell short of analyst predictions.

The smart phone maker also continued to diversify its client base beyond the corporate and government clients that have been its mainstay. At the end of the quarter, non-enterprise customers made up 34 per cent of its subscriber base.

Wireless from A to Z

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A is for Antivirus
B is for Bluetooth
C is for The Cloud
D is for dotMobi
E is for Email
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V is for Virgin
W is for WiMax
X is for XDA
Y is for Yucca
Z is for Zigbee

RIM earned $370.5m, or 65 cents a share, in the three months ending 1 December - more than double its profit of $175.2m, or 31 cents a share, for the same period a year earlier. Third-quarter revenue was $1.67 billion, up from $835.1 million a year earlier.

The result beat analyst expectations and the company's October forecast, sending its share price up 11.2 per cent to $119.03 in after-hours electronic trade. The shares closed at $106.99 on Nasdaq.

The company said it added about 1.65 million BlackBerry accounts in the quarter, which brought it to a total of about 12 million. It also shipped more than 3.9 million devices.

December is a crucial month for retail sales, which are becoming an increasingly important slice of RIM's revenue pie.

The company has launched a number of multimedia-heavy BlackBerry models such as the Pearl to attract users other than the executives or other professionals who make up the bulk of its customers.

Jim Balsillie, RIM's co-chief executive, told analysts that those efforts - bolstered by promotions from carriers - are bearing fruit.

He said Black Friday, the retailing day that marks the beginning of the US holiday shopping season, was RIM's "strongest day ever" in terms of net subscriber additions. He added that weekend additions have been strong since then.

Balsillie said: "This is in contrast to prior years, when we have traditionally seen a slowdown on Black Friday and the weekends following."

Carriers that offer BlackBerrys have been promoting the devices and offering cheaper data plans, which has also helped stoke RIM's growth.

For the upcoming fourth quarter, RIM expects to add about 1.82 million subscribers, short of the 1.88 million that analysts were expecting.

Some observers have recently questioned whether RIM will be able to maintain its torrid pace of growth while a credit and liquidity crisis roils the financial-services companies that buy its smart phones.

But Balsillie said demand from large corporations remains robust.

He said: "We believe that the enterprise market remains underpenetrated and that there are many opportunities for growth both in North America and markets around the world."