RIM spurs optimism with surprising growth and new phone

RIM, based in Waterloo, Ontario, a pioneer in the smartphone space, has lost market share in North America in recent years to Apple Inc. and Samsung Electronics Co. Ltd, whose more versatile and user-friendly devices have taken off.

RIM is trying to reinvent itself through a line of beefed up smartphones that will run on the BlackBerry 10 or BB10 operating system on which the company has staked its future.

In a bid to create excitement about the new devices, CEO Thorsten Heins gave his developers a preview of the smartphone and its features at a meeting Tuesday in San Jose, California.

Wearing an outfit few Silicon Valley executives wear — a gray pinstripe suit — Heins said the company was fighting for its future.

“There’s new energy and fighting spirit in this company,” he said, listing new features from web browsing to multitasking between applications.

Heins said BlackBerry’s subscriber base grew to 80 million in the quarter ended Sept. 1, compared to 78 million reported earlier this year.

The addition of subscribers surprised many on Wall Street and sparked a surge in the company’s share price. Most analysts had expected RIM to lose subscribers for the first time in its history in the recently ended quarter.

In a presentation that lacked the usual panache of big Silicon Valley events, executives showcased some of the new phone’s key features, such as the browser, and “flow” and “peek” features that allow users to access key features without a leave gap application.

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RIM has been fully focused on launching its new range of revamped devices in recent months, while its aging smartphone range has struggled to compete with the recently launched iPhone 5 and a slew of new Android devices in the market.

It badly needs a hit. The BB10 launch was pushed back from the last quarter of this year to next year, a decision that didn’t sit well with RIM shareholders.

“BlackBerry 10 is our most important launch ever,” he said.

Wallowing in his lows

RIM’s stock is hovering around a nine-year low on both the Nasdaq and the Toronto Stock Exchange. At its peak in 2008, RIM stock was changing hands at around $140 per share. On Tuesday, the company’s Nasdaq-listed shares closed 5% higher at $6.60. Toronto-listed shares rose 5.2% to CAD$6.50.

Even as RIM lost ground in the crucial North American market, its low-end devices were able to attract buyers in emerging markets, where consumers are much more price-conscious and where the much-admired BlackBerry messaging platform gives it an edge.

However, the growth from last quarter’s base of around 78 million users may come at a price as profits are biased toward lower-end devices. This could affect the closely monitored average retail price of BlackBerry devices.

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RIM will report results for the second quarter of the fiscal year on Thursday.

Heins said the company is also getting positive feedback on its new BlackBerry 10 devices from telcos who have been eyeing the new smartphones.

“We make believers out of our partners. We’re making believers who previously wrote BlackBerry off,” Heins said.

The BB10 devices, due for release in early 2013, will run on a new operating system that RIM says will offer a faster and smoother user interface and a better platform for apps that are critical to a smartphone’s success.

Paras Wadehra, an independent mobile app developer, said the BB10 is a definite improvement.

“They brought the older BlackBerry into the modern world,” he said, but added that the launch delay was frustrating. “They are taking a step in the right direction, but they are walking slowly.”

Wadehra, who has been playing with a mockup of the device for the past few months, liked the browser’s ease of use and multitasking.

The company, which is doing everything it can to attract developers to its platform, pointed to FourSquare Apps during Facebook’s presentation. The company said the BB10 would include all popular social networking apps.

And it played a music video with RIM head of development Alec Saunders singing a parody of REO Speedwagon’s “Keep on Loving You.”

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The conference attracted app makers from emerging markets in Asia, a region where BlackBerry phones are popular and growing.

Many were carrying multiple phones ranging from iPhones to Blackberries to an assortment of Android devices.

Vietnam-based developer Louis Tang chose to develop for BlackBerry because it was free and easy.

“BlackBerry is a very hungry platform,” he said. “Android has more competition and you make less money.”

Another Malaysian developer, Shukri Saad, said his free prayer app brings in an average of $1,500 a month from advertising on BlackBerry. He said this would not have been possible on other platforms.

Bellevue, Washington-based developer Neeraj Chawla said he’s impressed with some of the UI concepts like “flow” and “peek” and the ease of movement between apps in the new BB10.

CCS Insight Mobile Analyst John Jackson, who also attended the event, said he believes RIM’s new BB10 operating system is gaining traction with developers and he believes it will offer users a unique experience.

“The question now is whether the devices will be sufficiently competitive, and that depends in no small part on RIM’s ability to spend massive marketing dollars to cut through the noise of the competition,” Jackson told Reuters


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