BlackBerry-Maker Remains Confident Amid Apple iPhone Launch

Press Release - July 2, 2007

Even as Apple Inc. launches its much-hyped iPhone device in the United States, Research In Motion continues to surpass expectations in terms of both profits and BlackBerry sales.

Waterloo, Ontario-based RIM, famous for its wireless email devices, posted a first-quarter profit of US$223.2 million late last week, a 16% jump from the same period last year. Revenue has jumped an impressive 76.5% in the past year, to $613.1 million, with subscriber additions of 1.2 million in the most recent quarter alone.

The company’s co-CEO, Jim Balsillie, credits this success to ongoing diversification in the BlackBerry product line. Consumer-friendly devices like the Pearl and Curve are bringing wireless email and data functionality to a whole new market segment, he says.

“We’re seeing a good mix of upgrades and new subscribers,” Balsillie told analysts in a recent conference call. “The momentum we are seeing in terms of product launches, carrier support of BlackBerrys and subscriber additions is exceptional and we believe it will continue into the second half of the fiscal year.”

Balsillie brushed off concerns that the Apple iPhone would threaten RIM’s market dominance, asserting that all the iPhone hype has actually helped BlackBerry sales.

“I’ve said before they did us a great favour because they drove attention to the converged appliance space,” he explained. “The attention to it has quite frankly been overwhelmingly positive for our business.”

Market analysts, meanwhile, do not see the iPhone as a significant threat to Research In Motion’s core enterprise market. Business email customers are unlikely to switch in large numbers, according to Canaccord Adams analyst, Peter Misek, because RIM already offers a solid product, and users would need to change over to Macintosh computers to get the iPhone’s full benefits.