Interesting. Well, here's the article:
By MARTIN PEERS |
The wireless industry may be preparing for a transition to 4G. But Research In Motion is living the high life in a pre-3G world.
RIM reported Wednesday evening that a big seller in its strong fourth quarter was its BlackBerry Curve 8520. That's a low-cost device which runs on what the industry quaintly calls 2.5G networks, a step up from the relative snail's-pace of 2G but well short of 3G speeds.
The device's popularity makes sense. RIM has 3G devices, such as the Bold, which it said sold well in the quarter. Still, it is no secret that BlackBerrys aren't ideal for surfing the Web, regardless of speed. BlackBerry was designed for email, where the connection speed isn't important.
And plenty of people want simple devices. Indeed, RIM appears to be doing particularly well overseas: Revenue outside of North America accounted for 48% of the quarterly total, compared with 29% in fiscal 2009 full-year.
At the same time, RIM's average selling price continues to decline, hitting $311 per unit in the quarter, from $370 a year earlier. RIM forecasts this will fall to between $305 and $310 in the current quarter. Even so, RIM managed to boost its gross margin in the quarter just gone. In part that reflects lower manufacturing costs for the 8520, Deutsche Bank analyst Brian Modoff notes.
Essentially, then, RIM is making hay in the lower-end of the smartphone market. That isn't a good long-term growth strategy. Eventually, many of BlackBerry's users will want a smarter phone. The risk is that many opt for one of the growing array of sophisticated alternatives, like Apple's iPhone. That BlackBerry's fourth-quarter shipments were a little below its forecasts suggests that shift may have begun.