Torch Is RIM's Hottest BlackBerry Yet
Despite a lukewarm reception and mixed reviews, the new Torch has been the handset maker's best performer during its first few weeks on the market, based on sell-through, co-CEO Jim Balsillie told investors. He didn't share sales numbers for the device, but said the strong showing was accompanied by one of AT&T Inc. (NYSE: T)'s largest-ever national marketing efforts for RIM, and the marketing will get more aggressive heading into the holidays.
He said most of the subscriber wins for the device came from consumers rather than the enterprise, although that latter category is starting to pick up as well. RIM will launch the Torch with 75 additional carriers around the world in the third quarter.
The Torch is the first device to support BlackBerry OS 6, which includes a number of updates to the user interface, navigation, and app store.
Digging into the numbers
RIM's first-quarter earnings beat analyst expectations as revenues rose 31 percent to $4.62 billion, year on year. It shipped around 12.1 million devices, up 45 percent versus the previous year, bringing its total to 115 million units shipped to date. Its subscriber base also grew by 4.5 million in the quarter, a 56 percent increase over the prior year, extending its total to 50 million.
But, RIM did add fewer subscribers than expected in the US where it is up against increasing pressure from Apple Inc. (Nasdaq: AAPL)'s iPhone lineup and devices running Google (Nasdaq: GOOG)'s Android operating system, which are even encroaching on its home turf in the enterprise. (See Should RIM Support Apple & Android?)
According to the latest numbers from comScore, BlackBerry's grip is loosening even as it holds on to its top smartphone slot among Americans, with 39.9 percent market share. Between April and July of this year, RIM declined from 41.1 percent to 39.3 percent while Android's share climbed 5 percent. (See Gartner: RIM, Android See Boosts in Q1 and Smartphone Wars Pay Off in Q2.)
When asked about the competition, Balsillie maintained his slow, but steady mantra for RIM's plan of defense.
"I think it's dangerous to frame this in a high-end arms race," he said. "You'll see us go beyond what's expected by anyone, and yet still address the issues of cost effectiveness, security, efficiency, and desired form factors."
As it builds its attack plan, the company has also made a string of acquisitions to bolster its competitive positioning, the most recent being DataViz Inc. to focus on the tablet business. (See RIM's DataViz Buy Could Help With Tablet Biz, RIM Buys Up App Partner , and RIM Buys QNX.)
Balsillie said big news will come out of RIM's Developer Conference at the end of the month in San Francisco, which will "pleasantly surprise" investors. (See OS Watch: RIM Regrets & iPhone Instructions .)
"We're about a service that really delivers a set of promises. So it's a much more comprehensive role we're taking on and it’s a carefully regulated society, so we just have to slowly and systemically and patiently do what we do. But I think we're rather unique in that way, and I think it will serve RIM shareholders for a very, very long time." — Sarah Reedy, Senior Reporter, Light Reading Mobile