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Research In Motion reports huge earnings

Posted by Joe on July 2, 2007

The big news over the weekend in the financial world was not Apple and the release of it’s much ballyhooed iPhone. Rather, the focus was on a perceived rival, Research In Motion, which reported a monstrous 73% gain in first quarter earnings. This led to a heavy volume of activity on Friday, with 149,373 lots traded just in the early hours. For those of you not familiar with financial terminology, that’s “a whole helluva lot” in layman’s terms.

The iPhone may have actually spurred the rise in Research In Motion’s stock. Since Apple’s new gadget was announced in January of this year, many people began comparing it to the BlackBerry — though usually unfairly, since they serve different purposes. Since many thought that the BlackBerry is a superior device in terms of practical functionality, people may have demonstrated more confidence in Research In Motion during Q1.

That is, of course, speculation. It’s tough to know exactly why RIM saw such substantial gains, but that is one possibility. Apple saw their stock rise as well late in the week, particularly call volume in options, indicating that the general thought is that the iPhone will be successful. But, because of their respective natures, both the BlackBerry and iPhone can certainly find their own niches for success.

The confidence in the BlackBerry comes from it’s universality. The iPhone is available on one carrier and in one country for now: AT&T in the US. By contrast, the BlackBerry is available on 300 carriers in 100 countries. Adding to that, there are many different models of BlackBerries, where there is only one iPhone.

This is a good signal. We’re interested to see how BlackBerry does in Q2, which will include the release of the iPhone (500,000 were sold this weekend). Since analysts expect Apple to sell 3 million units this year, Q3 may be even more interesting.

[Forbes]