RIM spurs rare optimism with surprising growth, new phone

Wed Sep 26, 2012 6:32am IST

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* RIM says carriers impressed with its new BB10 devices

* Subscriber additions lift RIM shares on Nasdaq, TSX

(Adds background, analyst comment, details from event)

By Poornima Gupta

SAN JOSE, Sept 25 (Reuters) - Research In Motion Ltd RIM.TO said on Tuesday its BlackBerry subscriber base has risen to 80 million from the 78 million it reported earlier this year, surprising many on Wall Street and sending its shares up more than 3 percent.

Most analysts had expected RIM, for the first time in its history, to begin losing subscribers in the recently completed quarter as it has rapidly lost market share in North America to Apple's snazzier iPhone and Samsung's Galaxy devices.

RIM has been completely focused in recent months on launching its new line of completely revamped smartphones that will run on the new BlackBerry 10 operating system. Its aging line-up of devices, currently on the market, have struggled to compete against the recently launched iPhone 5 and a slew of new Android devices.

RIM Chief Executive Thorsten Heins, addressing a gathering of developers in San Jose, California on Tuesday, said despite these challenges the company was able to add subscribers in the quarter ended Sept. 1.

Even as it has ceded ground in the crucial North American market, RIM still has been able to lure buyers with its lower-end devices in emerging markets, where consumers are much more price conscious and where RIM's much-admired BlackBerry messaging platform gives it a big edge.

But growth from last quarter's base of roughly 78 million subscribers may come at a price, with gains skewed toward lower-end devices. That will hurt the closely watched average selling price.

RIM is expected to announce results for its fiscal second-quarter on Thursday. [ID:nL1E8KO3KM]

The company's Toronto-listed shares rose 3 percent to C$6.37 in midday trading, while its Nasdaq-listed shares rose 5 percent to $6.60.

POSITIVE FEEDBACK

Heins said the company is also getting positive feedback on its new BlackBerry 10 devices from the carriers that have had previews of the new smartphones.

"We are making believers out of our partners. We are making believers out of those who had previously written BlackBerry off," Heins said.

"BlackBerry 10 is our most important launch ever. And it is the most exciting launch I have ever led in my career," he said.

The BB10 devices, set to be launched 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.

At an extended demonstration, RIM executives showed off the new devices' 'flow' and 'peak' features, which enable users to access important features without leaving the current application or to move quickly to another function.

"The user experience is unique. I think sufficient initial developer support is assured," said CCS Insight mobile analyst John Jackson.

"The question now is whether the devices will be sufficiently competitive and that is in no small way a function of RIM's ability to spend massive marketing dollars to cut through the competitive noise," said Jackson, who is attending the event.

($1=$0.98 Canadian)

(Reporting by Poornima Gupta in San Jose, Euan Rocha and Alastair Sharp in Toronto; Editing by Janet Guttsman, Peter Galloway and Bernard Orr)

((euan.rocha@thomsonreuters.com)(+1 416 941 8185)(Reuters Messaging: euan.rocha.reuters.com@reuters.net)) Keywords: RIM DEVCON/

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