CDMA-based BlackBerry driving customer additions

Pent-up demand for Research in Motion Ltd.'s BlackBerry Pearl from carriers such as Telus Mobility and Bell Mobility in Canada and Verizon Wireless and Sprint-Nextel in the US helped drive customer acquisitions for the popular device to record levels in the fourth quarter. Speaking during RIM's fourth-quarter and year-end financial and subscriber results conference call last week, co-CEO Jim Balsillie attributed the strong growth to the introduction of the Pearl for CDMA carriers earlier last fall. "The heavy promotions of the CDMA Pearl drove a high number of net new activations throughout US and Canada," he said. "There has been significant adoption of the CDMA Pearl since it began its ramp at the end of the third quarter and with the introduction of different colours and pricing plans during the fourth quarter." The company added 2.18 million BlackBerry customers in the fourth quarter and now has more than 14 million customers in total. Approximately, 38% of all BB customers are non-enterprise users and one-third of total customers are located outside of North America. RIM is also bullish on its second quarter figures, resulting from what it believes is the beginning of a new device replacement cycle as well as the introduction of new CDMA-based BlackBerries. The company expects to add 2.2 million new customers in the first quarter. Verizon and Sprint will introduce a CDMA version of the BlackBerry Curve later this quarter and "we will see a similar strong take up in this product as we saw with the CDMA Pearl over the past two quarters," Balsillie said. With respect to device replacements, Adele Ebbs, VP of investor relations said, "We believe we are at the beginning of a new leg in our replacement cycle in which many BlackBerry 8700 users are coming off their two-year contracts and are ready to upgrade to a newer BlackBerry handset," she said. The consumer market will also be critical for RIM in the future. "We believe that as penetration into the consumer market has grown as a percentage of our business, these types of seasonal market programs are more of a factor than in the past," Ebbs said. "We believe that the positioning of the BlackBerry solution as a mainstream offering by our partners late in the third quarter and throughout the fourth quarter has led to a new base level of net activations from which we can grow in future quarters." Unite comes to North America The much talked about BlackBerry Unite is finally coming to North America. "We're just rolling out in North America, literally this month," Balsillie said during the call. "Quiet betas and trials have really been quite exceptional." The BlackBerry Unite program is enabled by a free piece of software - similar to the BlackBerry Exchange Server (BES) RIM sells to the enterprise community - that when loaded onto the home computer turns the PC into a server. "So this is a sort of client/server architecture with a very thin client where the PC becomes the server," Balsillie explained during an investors conference last November. "What does is it makes the PC a server to a small workgroup which would be a SOHO or a family."

CDMA-based BlackBerry driving customer additions

News | April 7, 2008

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