DECEMBER 16, 2010, 6:51 P.M. ET.

RIM's Profit Jumps 45% on BlackBerry Sales

By PHRED DVORAK And STUART WEINBERG

BlackBerry maker Research In Motion Ltd. posted a 45% jump in earnings and a sixth consecutive quarter of record phone shipments—even as investor concerns mount over a continued erosion of market share by rivals like Apple Inc.

RIM said it shipped 14.2 million BlackBerrys in the three months ended Nov. 27, up 40% from a year earlier. The company narrowly beat Apple's iPhone sales in its latest quarter, which ended in October.

RIM didn't break out unit sales for its newest model, the BlackBerry Torch, but co-CEO Jim Balsillie said the company was seeing strong interest—particularly from corporate customers—for the PlayBook tablet, expected out in the first quarter of next year.

"Phase one of [PlayBook] shipments is going to be very heavily weighted toward'' businesses, Mr. Balsillie said. He said companies are attracted to the PlayBook because of its tight security and the ability to integrate it into corporate technology systems.

The strong earnings and phone sales come amid rapid growth in international markets, as consumers world-wide switch to high-performance handsets like BlackBerrys from ordinary cellphones.

On its earnings call, RIM said that last year one country— likely the U.S.—comprised more than half of revenue. This past quarter, the U.S. comprised around a third, while phone shipments surged everywhere from Latin America to the U.K. and Southeast Asia.

Yet world-wide, RIM snagged only 14.8% of smartphone sales during the quarter ended Sept. 30 versus 20.7% a year earlier, according to data-tracker Gartner. That put RIM behind phones running Nokia Corp.'s Symbian, Google Inc.'s Android and Apple's iOS systems.

RIM's earnings in the fiscal third-quarter were $911.1 million, or $1.74 a share, up from $628.4 million, or $1.10 a share, a year earlier. Revenue jumped 40% to $5.49 billion.

The company forecast fiscal fourth-quarter earnings of $1.74 to $1.80 a share on revenue of $5.5 billion to $5.7 billion.

The competition is making in-roads into the corporate-smartphone market, where RIM has traditionally dominated. In October, Apple said over 80% of Fortune 500 companies are deploying or testing the iPhone.

RIM-watchers are pinning their hopes on the PlayBook to help stem this erosion. The tablet will feature an entirely new operating system, QNX, that RIM executives say is faster and more powerful than those fielded by rivals, including Apple's iPad.

In recent weeks, RIM has demonstrated the PlayBook running video and other applications at the same time, as well as displaying Web content that uses Adobe System Inc.'s popular Flash software—things the iPad can't do.

"I think the PlayBook redefines what a tablet should do,'' Mr. Balsillie said on the earnings call.

For the time being, however, only the PlayBook will run on QNX, and BlackBerry users will still be stuck with smartphones that many say don't perform as well as iPhones or Android handsets. Mr. Balsillie wouldn't say when BlackBerry phones would also run QNX.

In recent months, RIM has revamped its support for third-party application developers, overhauled its BlackBerry operating system to make it more user friendly and introduced the Torch, the first BlackBerry with a touch screen and slide-out keyboard. RIM acquired Swedish user-interface designer The Astonishing Tribe, or TAT, earlier this month.

Write to Phred Dvorak at phred.dvorak@wsj.com and Stuart Weinberg at stuart.weinberg@dowjones.com

http://online.wsj.com/article/SB1000142 ... 95744.html