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RIM's Dual Focus

BlackBerry 's share price dropped almost 8 percent today after the company missed revenue expectations for the quarter on Wednesday evening. The Canadian gadget vendor made it clear, however, on its earnings call that it intends to continue with what it sees as a winning approach to the consumer and enterprise markets.

The maker of the BlackBerry mobile email device announced a tenfold profit increase to $187.9 million for its fiscal fourth quarter yesterday. Revenue for the fourth quarter was $930.4 million, up 66 percent from the same quarter last year. Some analysts, however, had been expecting revenue of $935.35 million for the quarter ended March 3, 2007. That miss caused the fall in RIM's share price today. (See RIM's Profits Rise in Q4.)

Nonetheless, on the conference call, RIM executives laid out a strategy that will continue to push the company's consumer efforts as well as trying to grow its well established enterprise business by improving the BlackBerry's ability to act as a single, converged office phone for corporate users.

"There's no question this has now gone consumer," Jim Balsillie, Co-CEO said on the call. "It's like a switch went off in the last two or three months."

Most of the consumer growth is down to the Pearl phone, but the company does have other consumer-focused gadgets, such as the Crimson, waiting in the wings. The company noted, however, that what drives consumer sales can be seemingly trivial changes such as introducing a phone in a new color. (See RIM's Crimson Tide.)

Traditionally, enterprise business has been what has driven growth at RIM, and the company says that it will release new business software very soon. Balsillie says that developing secure corporate email systems has helped the company to understand how to put together easy-to-use software for consumers.

"The door to the consumer is through the enterprise," he opined.

One of the key trends that the company is following in the enterprise world is fixed/mobile convergence (FMC). For RIM, this means extending the functions of a corporate desk phone to the BlackBerry so they can be accessed just like corporate email.

The firm started down this path by buying Ascendent Systems and bringing a degree of convergence capabilities to the new 8800 device. It says that it is now beta-testing more FMC software. (See BlackBerry Convergence.)

The company still faces questions, however, about the stock options controversy that has already caused Balsillie to step down as chairman of the board. The firm wouldn't comment further on the call about the now official Securities and Exchange Commission (SEC) investigation.

— Dan Jones, Site Editor, Unstrung

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