Research In Motion (RIM) stock soars on record Blackberry sales

Wall Street got a bit of a shock in the way of good news from Ottawa-based Research in Motion today.

RIM reported record revenue of US$3.46 billion for the quarter (which included the holidays), up 84% year over year.  It shipped 7.8 million devices in the quarter which is also a new record for them. They also added almost four million new subscriber accounts, a secondary source of income in the way of Client Access Licenses or CALs.

stock data via Yahoo finance

So much for the economy battering technology across the board.  RIMM is up almost 25% in after hours trading.  This is having a positive affect on AAPL as well sending Apple shares up 3%.

So why is this smartphone vendor doing so well in the gloomy economy?  My hypothesis is this: Blackberries are cheaper than laptops.  Not just initial cost but maintenance and insurance as well.  As smartphones are doing much more than they used to do, companies are letting employees go without a corporate laptop.  

They aren't just replacing laptops either.  They are replacing the "dumb" phones that used to be given to employees.  Also, as this quarter for RIM covers the holidays, it means that a lot more consumers have moved from ordinary phones to smartphones like the Blackberry.

Also, Blackberries aren't fancy.  The higher end models do interesting things like video and camera, but the mainstay of Blackberry is corporate communications.  They are very pragmatic for companies that might not want to invest in costly new multimedia smartphones at the moment.

In addition to cutting big ticket spending, companies are now also replacing the voice plan "dumb" phones with data-only Blackberries.  Email communication is often more effective and inexpensive than voice plans, especially when roaming. 

Finally, as more companies are downsizing and turning to work at home freelancers, the need for mobile communication devices is rising.  Blackberries are great all-in-one communications devices that inexpensively let work from home employees participate in the day to day corporate world.

Oh, an a certain someone's obsession with his Blackberry certainly didn't hurt.  "President Barack Obama's endorsement of the BlackBerry helped. Obama fought to keep his BlackBerry when he became president. His BlackBerry has been a constant companion, and he had noted publicly that he was negotiating to find a way to keep it despite security concerns and records-keeping issues."
 

I don't expect Apple's iPhone to have quite as good a quarter (Apple already posted its holiday numbers) due to the fact that people are already holding out for new devices in the summer.  Apple has already started some inventory clearing tactics in anticipation for what seems to be a June product refresh.