During Research In Motion’s Q3 conference call today, Co-CEO Jim Balsillie provided a number of interesting statistics related to how the Blackberry maker is transitioning from being primarily an enterprise-focused company to one that also serves the consumer market. He also said the BlackBerry Storm, the company’s first touchscreen phone, is selling swiftly, making it difficult to meet demand. Release. Conference call.
Consumer demand and Storm sales: Balsillie said consumers now make up 45 percent of the subscriber base, and 60 percent of new subscribers during the quarter were consumers. Additionally, 75 percent of phones went to new customers in the U.S., and an even higher percentage in Europe. “The Storm has been more popular sooner and faster than we expected. Demand for the devices has been stronger than we anticipated, and its continued to be sold-out even though we’ve been replenishing supply regularly. We have not been able to meet demand in North America. The Storm is overwhelming attracting new subscribers.” RIM (NSDQ: RIMM) said it expects supply constraint to be made up in the coming weeks.
Margin Pressure: The shift to new products by consumers has lowered margins because of the high-end devices. “As volumes ramped, we expect margins to improve, as they grow as part of the mix.”
On economic turmoil: Balsillie said that strong sales will continue in Q4, and throughout the holiday season. January may be seasonally slow, but they expect sales to pick up again in February. “December has been a really strong month, and many carriers are seeing their highest level of net subscriber adds ever.”
Q&A after the jump….
— How will the lower margins work out over the long-term: Basillie said “There are some new revenue streams are coming in on the Blackberry platform, not the least is the App store, but many other things. I believe there’s an opportunity. Do we feel like we are in very stable place? Yes. Do we have opportunity to enhance the over time? Yes. There’s a land grab going on; our products are loved. The absolute specifics of the model will be clear over time. Our products are adopted, and there’s lots of chances for enhancement. Despite of the challenging times, we feel remarkably good about where we are, yeah we have to get new revenues and get the costs down, but the core aspects of the company are stable.”
— Did revenues falter because of product delays or the economy?: “Why are we rocking it out so strong in December and in January? With the results of new products and strength in December…, we can’t be more delighted. I would give a disproportional weight in delay of products, but that didn’t explain a reduction of subs in September, but then they have been nice in November and December. What has happened, the quality of our product portfolio has created a global buzz…BlackBerry is a platform and we have a capable design team. If you knew the roadmap, and how special it was for different partnerships, you’d see a rich roadmap for 2009 and 2010, you would be blown away.”