RIM issues brighter outlook after jump in profit

Ottawa : Research In Motion (RIM) posted a big jump in profit and issued an even stronger outlook on Thursday, as sturdy demand from holiday shoppers helped the BlackBerry maker fend off the competition.

Shrugging off fears that Apple and other rivals were eating its lunch, Canada's top technology company said it shipped a record-breaking 10 million smart phones, sending its shares surging 12.1 per cent in after-hours trading.

The results not only surpassed expectations for the third quarter, but its forecast for the current quarter easily topped what most analysts were anticipating.

MKM Partners LLC analyst Tero Kuittinen said the sales outlook is a strong signal that RIM is successfully cracking the consumer market.

Positive surprise

"That's a major positive surprise because people have been very sceptical about the February quarter," he said. "People wrote off RIM too soon."

Competition did hurt rival Palm Inc, which posted a bigger-than-expected quarterly loss as consumer demand for its smart phones waned.

Shares in the company, which has worried investors with hefty costs as it tries to turn around its business, slumped four per cent after its results were announced on Thursday.

RIM is waging an aggressive push into the mainstream market in an effort to drive growth and diversify its customer base beyond business professionals who use the BlackBerry for secure wireless e-mail service. At the same time, it faces growing competition from Apple's iPhone and Motorola's Droid.

Some 80 per cent of new subscribers were non-business users, but RIM said its corporate base also grew, with especially strong gains in international markets.

Chief executive Jim Balsillie said reports show smartphones now represent 50 per cent of total market for hand-held devices.