RIM on a roll
TheStar.com - RIM on a roll
Revenues, sales and profits are all at record levels for the Waterloo-based firm
TYLER HAMILTON
TECHNOLOGY REPORTER
WATERLOO - There couldn't be a better time for Research In Motion Ltd. to celebrate its 20th anniversary.
With a market value of about $11 billion, RIM became a North American investment darling after blowing away analysts' expectations last quarter, more than doubling revenues from a year earlier and significantly increasing profits.
The company's share price now hovers above $120, twice what the stock was worth two months ago and more than seven times higher than its 52-week low.
Business, meanwhile, is going gangbusters. As of this month, more than one million people subscribe to RIM's popular Blackberry service, while demand for its e-mail and phone device remains robust.
Next week alone, U.S. wireless carrier T-Mobile will hand out the little gadgets to every one of the more than 5,000 people expected to attend IBM PartnerWorld in Las Vegas.
Based on the number of jobs listed on the company's Web site, RIM is looking to add another 9 per cent to its workforce just to keep up with global orders.
Whatever manufacturing it can't cover in-house it plans to outsource, probably to somewhere in Europe.
To top it all off, a $1 billion (U.S.) stock offering last month will help fund this expansion, as well as demonstrate to RIM's wireless-carrier partners that the Waterloo-based company is financially secure and has enough cash under its pillow to be a stable, long-term partner.
For co-chief executives Jim Balsillie and Mike Lazaridis — the latter responsible for founding RIM on March 7, 1984 — this all sounds like a good reason to party.
"I'm going to take Mike on a 20th anniversary cruise," jokes Balsillie during an interview at the company's sprawling Waterloo headquarters, as if the two executives have any time these days for a vacation.
It's difficult to figure out what they do have in store. "There's an element of surprise," says Balsillie, adding that there are many logistical issues to nail down so the celebrations can coincide with something else — whatever that "something" might be.
Sources say the company has traditionally held big blowouts after a major financing. As part of any fund offering, it usually requires the investment bankers who underwrite the deal to spring for a big bash and bring in bands such as The Tragically Hip or Barenaked Ladies.
Considering the size of the recent share offering, you've got to wonder whether U2 is coming to perform for the company's 2,000-plus workforce. "If all forces come together we'll have a real good celebration," says Balsillie.
RIM has grown over the past two decades from a small engineering consulting business to a 10-person wireless-data software shop to a global leader in "real time" mobile data services, not to mention a homegrown manufacturer of handheld devices that converge voice and secure e-mail.
It is unquestionably the pride of Waterloo, if not the country. The Blackberry is just as much Canadian as the moose, maple syrup and hockey. Outside of Canada, RIM is simply tops at what it does.
"The company boasts the broadest portfolio of handheld data products as well as the deepest engineering talent," wrote GMP Securities analyst Ray Sharma in a recent report. It has "more employees dedicated to wireless data than most of the largest (original equipment manufacturing) organizations in the world."
RIM and its addictive Blackberry handheld can take credit for creating a culture of communication that didn't exist when the product was introduced five years ago. Blackberry has justly earned the nickname "Crackberry" for its addictive properties.
Quite simply, you can't put it down once you've given it a try. If somebody's got their head down in a meeting, chances are they're sending or reading e-mail over a Blackberry.
"People say we've destroyed meetings," says Balsillie. "I think we've liberated people from boring meetings. We've liberated people from long stoplights. We are the great liberators for type-A personalities."
The first versions were the size of a pager and worked over proprietary data networks such as Mobitex. A miniature keyboard let people send and receive e-mail with little effort — a huge improvement over the awkward and inefficient keypads of mobile phones.
More recent versions of Blackberry have taken on the look of a Palm handheld, giving the devices a bigger screen and more features.
When mobile phone carriers around North America and Europe began upgrading their wireless networks to 2.5G — meaning their networks were capable of handling wireless data at relatively high speeds — RIM was quick to pounce on the opportunity.
The company upgraded Blackberry, added a mobile phone feature, and worked hard to convince the carriers that the devices would be a smart way of driving more data traffic to their networks as part of new voice/data packages.
The strategy paid off.
February 22, 2004 at 12:47 PM in Business Models | Permalink
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