Research in Motion (RIM) today forecast its push email service would surpass 5m subscribers by the end of its financial year, up from the 3.65m it said it had at the end of its second quarter of fiscal 2006.
For the three months to 27 August 2005, RIM reported revenues of $490.1m, up eight per cent sequentially and 58 per cent year-on-year. Once again, 70 per cent of its revenues accrued from hardware sales, the rest coming from services (18 per cent), software (eight per cent) and other items (four per cent).
Net income for the period was $111.1m (56 cents a share), up 57.4 per cent on the year-ago quarter's $70.6m (36 cents a share) but down 16 per cent on Q1 FY2006's $132.5m (67 cents a share).
On a non-GAAP basis, the sequential drop becomes a rise: $120.2m in Q2 to $110.1m in Q1. Higher litigation expenses and a $6.2m inventory write-down and incremental warranty item this quarter, plus a big tax recovery in Q1, account for the difference.
Looking ahead, RIM said it expects Q3 to yield revenues in the range $540-570m, yielding earnings of 62-68 cents a share, both higher than previously forecast. The company said it expects to recruit 680,000-710,000 more subscribers during the quarter, when ends 26 November.
For Q4, it's looking to report sales of $590-620m, earnings of 74-81 cents a share, all on the back of a 775,000-825,000 increase in subscriber numbers. At the lower end of Q3 and Q4's subscriber-addition ranges, RIM should easily surpass 5m subscribers by 4 March 2006, the end of its current fiscal year. It also reckons its annual sales will pass the $2bn mark.
Q3 and Q4 should see the introduction of next-generation Blackberry devices based on Intel wireless and processor technology, which are expected to increase the RIM devices' data transfer speeds and widen their network support.
Then again, December will see the arrival of Motorola's Q, pitched head to head with the classic Blackberry form-factor, and Palm will introduce its Windows Mobile-based Treo smart phone in January. With so much of RIM's revenues coming from hardware, its next-generation models will need to offer something special if the company's to compete effectively with these players and build subscriber numbers as it hopes to. ®