If there’s supposed to be a big slowdown in corporate I.T. spending, then someone forgot to tell Research In Motion. The Canadian maker of the wildly popular BlackBerry wireless device reported sales that doubled over the year-ago quarter and profits that grew even better over the same period.
But then corporate spending was really only part of the story for RIM, which has over the year made a concerted push into consumer markets with new, sleeker devices, adding cameras and music-playing features it had long eschewed.
Profits Soar
Clearly RIM’s new image — less suit, more T-shirt — is paying off. Sales for the quarter were $1.67 billion, a 100% improvement over the $835 million reported a year ago, and a 22% boost from $1.37 billion in sales during the prior quarter. Profits came in at $370.5 million, or 65% per share, 111% better than in the year-ago quarter, and a 28% improvement sequentially.
RIM’s powerful results delivered a strong counterpoint to the conventional wisdom that tech spending by large corporations, the company’s bread-and-butter customer base, is heading into a slowing period. The ongoing credit crunch, which has pummeled the financial community and resulted in restructuring and layoffs at banks and other institutions, would appear to drive right to the heart of that base. Investment bankers and financial executives are big BlackBerry addicts, and in most cases their devices are paid for by employers.
Yet the company appears to have suffered no ill effects whatsoever. RIM added a net 1.65 million subscribers, and shipped 3.9 million units, finishing the quarter with 12 million Blackberry users. Nearly half of the new subscribers were either consumers or small business accounts, RIM co-Chief Executive Jim Balsillie told analysts.
The numbers beat analysts’ expectations; many of them had predicted revenue of $1.65 billion, per-share earnings of 62%, and 1.7 million…