RIM Upbeat About U.S. Despite Increasing Reliance on Other Markets

North America “is still performing very, very well” for Research In Motion’s BlackBerry devices, co-CEO Jim Balsillie said in a Thursday earnings call. “I feel very, very good about” the U.S., he said, despite the company’s increasing reliance on other markets as the iPhone and Android smartphones continue to take market share away from RIM devices.

Balsillie conceded it was “a very turbulent sector,” where “the ecosystem is changing a lot and changing fast and business models are changing fast.” But he said, “I feel great about where we're sitting for 2011 in the carriers in North America. We've held our base and we've had growth in shipments.”

Profit for RIM Q3 ended Nov. 27 grew to $911.1 million, $1.74 per share, from $628.4 million, $1.10, in Q3 last year. Revenue jumped 40 percent from Q3 last year to $5.49 billion. RIM shipped about 14.2 million devices, up 40 percent, in Q3 at an average price of $315, said Chief Financial Officer Brian Bidulka. More than 50 percent of the shipments were in the last month of Q3, as RIM’s “partners prepared for the holiday buying season and new products rolled out in markets around the world,” said Bidulka. U.S. revenue accounted for about 34 percent of RIM’s Q3 revenue, versus about 12 percent from the U.K., he said. Sales outside the U.S., U.K. and Canada made up about 44 percent of Q3 revenue, he said.

Markets outside the U.S. “continued to adopt BlackBerry in record numbers and BlackBerry is the number one smartphone in several markets in Western Europe, including the U.K.,” said Balsillie. BlackBerry was also the number one smartphone for the third straight quarter in Latin America, he said.

Aggressive promotions helped drive sales of BlackBerry devices in Q3, said Balsillie. In North America, BlackBerry devices were included in various Black Friday and other holiday promotions that are continuing through this month, he said. The BlackBerry Torch, meanwhile, launched in more than 75 markets in Q3 and RIM “saw our weekly sellthrough run rates increasing substantially quarter-over-quarter,” he said. Torch and BlackBerry 6 “are receiving strong support from our partners, including substantial marketing campaigns,” he said. “The campaigns are driving excellent results, which we expect to continue throughout the holiday season.” There’s also been strong demand for Torch in the Middle East, he said. The device is “rolling out in Latin America and we expect to see the initial excitement around the product extend as we add additional partners in Asia and other international markets in Q4,” he said. RIM also introduced two new colors for Torch, red and white, in the U.S., coinciding with $99 pricing introduced by AT&T, and “sellthrough run rates have increased as a result of these programs,” he said. Torch is being featured in AT&T’s holiday marketing campaign that will “have high visibility through to the end of the year,” he said. RIM also expects “good visibility throughout Q4” in the U.S. via “participation in New Year’s and Valentine’s Day promotional activity,” he said.

RIM’s partnership with Verizon “remains strong,” Balsillie also said. The manufacturer expects to roll out various new products and services with Verizon “over the coming year, including the availability of BlackBerry 6 for Verizon’s Curve 3G and Bold users early in the new year,” he said. The BlackBerry Curve 3G launched with 118 carriers in 48 countries in Q3, and “is gaining traction with partners in Europe and Canada as well as the U.S.,” he said. RIM expects “to see continued momentum from the Curve 3G as it rolls out in Latin America with significant carrier support and promotion,” he said.

Initial customer and partner feedback to the PlayBook tablet that RIM unveiled in September but won’t ship until spring was “overwhelmingly positive,” Balsillie said. Revenue from the device wasn’t factored into RIM’s Q4 forecast, said Investor Relations Vice President Edel Ebbs. “We expect the first revenue impact from PlayBook to be in RIM’s first quarter,” she said. The company expects to report Q4 revenue of $5.5 billion-$5.7 billion, with earnings per share at $1.74-$1.80.