Everyone
wants to mash the Blackberry.
Smart
phone rival Palm, wireless handset titans Motorola and Nokia, iPhone creator
Apple, push-mail vendor Microsoft, and maybe even Google, if the rumored
G-phone materializes. All want a piece of the market.
The giants may hover, yet Blackberry creator Research In
Motion, based in Waterloo, Ontario, has won a place atop the corporate
smart phone market and is rapidly expanding into the consumer market.
In the process, RIM has grown up, with a market
capitalization ($36 billion) now roughly the same as Motorola’s, making it an
unlikely acquisition target for its rivals, says Tavis McCourt, an analyst at
Morgan, Keegan & Co., headquartered in Memphis.
In
the quarter ended June 2, RIM blew past Wall Street earnings estimates,
shipping about 2.4 million Blackberries and notching revenues of $1.1 billion.
The stock has been trading on the Nasdaq at around $200 recently.
To
RIM co-Chief Executive Jim Balsillie, even the media blitz surrounding June’s
iPhone launch was a plus. “They drove attention to the converged appliance
space,” he said in a conference call. “iPhone is launching, to the best of my
knowledge, in one carrier and one country and we’re in about 100 countries and
300 carriers.”
RIM
got to be a global smart phone player in large part through the efforts of
founder and co-CEO Mike Lazaridis, says Toronto-based Paradigm Capital analyst
Barry Richards, who has covered the company for a decade.
“Mike
Lazaridis is a Steve Jobs type of guy,” Mr. Richards says. “He’s a genius in
innovation.”
In
the power-sharing arrangement, Mr. Lazaridis works on product development,
while Mr. Balsillie focuses on finance.
Helping
to rev RIM’s engine are the subscription deals it cuts with carriers. Mr.
Richards figures the company gets $7 per month per user for driving usage of
the carriers’ lucrative data plans.
Another
key to RIM’s growth is the launch of new consumer Blackberry models like the
Curve and Pearl.
Mr. Richards estimates that 10 to 20 percent of the 2.4 million Blackberries
shipped last quarter went to consumers instead of traditional business users.
Consumer
interest comes in part, Mr. Richards theorizes, through “leakage” as the
children and spouses get a taste of the addictive “Crackberry” from corporate
users.
Even
if RIM’s rivals succeed in grabbing market share, Mr. Richards says the smart
phone category seems destined to increase from a niche market to at least a
quarter of all mobile phones shipped.
That
means RIM has plenty of room to run.