Research in Motion Tries Hard to Live On - Subscriber Base Actually Grows

It may have been otherwise difficult to know it, but Research in Motion (RIM) is holding an “Americas” Developers Conference down in San Diego and running today through Thursday. The event will end on Thursday September 27, 2012 with a transition to RIM’s quarterly earnings call on Thursday evening. Today RIM’s CEO, Thorsten Heins, along with various senior members of his team, presented an extended general session keynote that showed off some of the new capabilities RIM is working on with BlackBerry 10.

All of the demos looked to be running on what appears to be the same developer mobile device that the company brought out back in May 2012 during BlackBerry World. In fact, we did not note anything new during today’s keynote session – which we will provide a more in-depth review of it on Wednesday, September 26, 2012 – stay tuned for that.


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There was one very interesting thing RIM detailed today that did catch the eye of the headline writers. Let’s set the context for it: most, if not all financial analysts were prepared to hear on Thursday, during the quarterly earnings call, that RIM would be losing subscribers – something that has never happened to RIM since we first began covering them back in 2003 – a time when breaking one million subscribers was considered an almost unobtainable goal. Last we had heard from RIM on the subject of subscribers during its last earnings call, the company had reported growth of its subscriber base from about 75 million users to roughly 78 million users.

We have noted ongoing during the last several years of RIM’s descent down the abyss, that no matter how far RIM climbed down, its subscriber rate continued– inexplicably for some – to grow. We’ve pointed out this interesting strength time and again, that subscriber growth has remained a RIM asset even as its inability to deliver any exciting hardware continues to drive the company deeper into the abyss.

Well, in spite of financial analyst concerns, RIM revealed today that RIM has managed to once again grow the subscriber base, which now stands at 80 million. This continues to be an amazing capability – subscribers are only counted by RIM when an e-mail account is actually activated, and it maintains a careful list of active accounts. New subscribers translate to new RIM hardware being sold, so that one can reasonably assume that two million new RIM devices – which would or the most part be BlackBerry 7 hardware – were sold in the most recent quarter.

The problem, however, is that the wireless carriers are heavily discounting the cost of the devices – but unlike the iPhone, which the carriers themselves pay huge subsidies on, it is RIM that has to provide the device discounts from its end. So those two million new subscribers are buying up hardware with razor thin margins and do not deliver any real profits.

The subscriber numbers – and their sheer size - continue to convince us that there is real value that can be unlocked from RIM – but we seriously doubt that it is going to be RIM and its hardware that will unlock it. We continue to believe that a partnership with Samsung that can exploit both the new BB10 operating system and the RIM subscriber base is the way to go.

Keep an eye out for our upcoming report on the entire developer’s conference general session as well as RIM’s upcoming earnings call.

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