Fone Forum

Momentum is with BlackBerry after 84% surge in annual sales

BlackBerry manufacturer RIM has stunned the market today with a set of results that has bucked the series of gloomy outlooks from other manufacturers.

The company sold 7.8 million BlackBerry devices between December 2008 and the end of February 2009, and a total of 26 million handsets for the 12 months up to February.

RIM's sales totalled £7.5bn for the year, an 84% improvement from the previous 12 months and it made profits of £1.8bn, an increase of 46%.

Market giant Nokia revealed in January that its shipments totalled 113 million devices for 2008, generating £32bn in sales (a 7% fall) and £4.5bn in profits (a 38% fall).

Although Nokia is a vastly bigger manufacturer, operating in many more countries with a broader range of devices, the Finnish company has identified RIM as one of its most serious rivals.

RIM’s latest profit margin was 24.6%, compared with 28.8% the previous year, while Nokia reported a margin of 16.6%, compared with 20% for the previous 12 months.

RIM’s co-CEO, Jim Balsillie, said: ‘The most difficult aspect of gross margin is turbulence in currency swings around the world.’

The growth is on the back of increased take-up of BlackBerry devices by younger consumers, as well as making deeper inroads into the corporate market, according to Balsillie.

Around 70% of RIM’s sales are understood to be coming from America, and the UK is seen as the most important market outside its home territory.

Vodafone had a 60% share of the 208,000 BlackBerry devices sold in the UK.  The likes of Orange, T-Mobile and O2 are looking to take a better share of the BlackBerry market in 2009.  3 was also expected to unveil a BlackBerry device this year, but it has failed to emerge so far.

RIM’s distributors in the UK, Brightpoint and 20:20, are looking to take more BlackBerry devices into general retailers such as Tesco and Argos, as well as to more, smaller independent dealers.

In January, RIM appointed former Vodafone technology chief Chris Burke as its new managing director for Europe, Middle East and Africa.

RIM’s success appears to have come from the BlackBerry Curve2 (Javelin), and more people taking BlackBerry devices such as the Pearl on prepay.

CCS Insight senior analyst Ben Wood said: ‘BlackBerry devices are clearly hitting a sweet spot in the market, and there is tremendous momentum behind them now.  It’s cause for optimism, and reflects that there is a huge role for QWERTY devices.  There has clearly been a viral effect for the use of BlackBerry devices for instant messaging, Facebook and also traditional mobile email.’

This impressive performance from RIM comes after a profits warning in February, and an even more pessimistic outlook in December 2008 as fewer customers were apparently upgrading than had been expected.

In September last year, Balsillie revealed results below expectations, leading to a 15% drop in RIM’s share price.  This rose by 20% on the back of today’s results.

See:-   here (http://www.mobiletoday.co.uk/RIM_performs_well_in_2008.html).