RIM Investor Conference Call: what Jim Balsillie said

Comments

RIM CEO Jim Balsillie

After RIM had run through the relevant Q2 financial results and Q3 guidance yesterday during their Investor Conference Call, the floor was opened up so listeners could ask RIM co-CEO Jim Balsillie a variety of questions. While many today are focused upon RIM’s inability to keep down costs or hit earnings targets, I was quite intrigued by the answers as to why this had happened.

After the jump we have a breakdown of each answer Balsillie gave, from upcoming device promotion, prepaid BlackBerry data, strategic goals and new surprises.

One questioner had been interested in RIM’s sales growth and its relationship to heavy promotional partnerships with carriers and from RIM. He posed the question of whether RIM would eventually see their sales reflect a more seasonal scale as promotion died down. Essentially, RIM’s CEO responded that the promotion wouldn’t be stopping any time soon:

We saw a surge in sales during Black Friday last year with a very strong flow into the new year, which was pretty unexpected. If all these upcoming “hero programs” take the traction we think, sales will continue to carry through.

If you’re talking about the Spring, that’s really getting out of our visibility, because the smartphone is displacing the common phone, but our view is that it’s really a time for adoption. Beyond that, the nuancing of tweaks in the model and the seasonality is not in our heads. It’s about driving these hero campaigns… We’ve never introduced so many products so fast. But we are the market share leader and you have to extend and drive the adoption all the way.

Balsillie was also asked that if with the launch of the BlackBerry Pearl Flip 8220, RIM was looking to grasp the pre-paid phone market. However, at the present time, many carriers do not offer BlackBerry data on prepaid SIMs (boy did we learn that while in San Francisco during CTIA).

We’re working on prepaid plans for data. The key thing for the carriers is to create a platform relationship with data services to their customers. The prepaid voice thing isn’t as strategic.

Pretty soon I think that all phones will be smartphones, so data might be there, but sold latent. There has been more interest in prepaid data than prepaid voice, so getting data into a prepaid model is becoming a big, big part of what we’re doing.

Next, Balsillie was asked if rising costs were due to a shift in the market landscape or an newfound inability on RIM’s part to pass of new platform costs. He deflected this question fairly easily by making it about growth rather than cost.

(High costs are) pretty normal when we introduce new products, but the key is that we’ve never introduced so many products at once. But we’ve never been put in so many hero campaigns, where we’re the only device featured for the season.

I wouldn’t put it to a competitive thing, it’s new products and new hero campaigns. Wait 30 days when you see these campaigns – it’s like nothing you’ve ever seen before. And if (carriers) put their shoulders into it, we got to meet them a bit on the costs. We’re just simply positioning for greater adoption. This isn’t just smartphone vs. smartphone: some of it’s smartphone versus legacy.

And there are some surprises: some you know about and some you don’t.

Finally, after a series of questions reflecting investor concern over RIM’s future forecast, Balsillie went to great lengths to defend the company’s strategy.

We’re in a land grab situation, and it’s hard to get perspective a couple of quarters from that. But we’re unambiguous about our growth. Strategically, running this company, it’s all about adoption right now. There’s a turbo charging and a massive disruption going on in a major way if it’s played properly.

Exactly how the model plays out…. If we’re there, great, but if we give up ground for short term gratification, that’s just not in the best interest of our shareholders. It’s just not. Also, I blink and we’re on 400 carriers now. It wasn’t too long ago it was 25… We’re Balancing so many things and we’re balancing them exceptionally.

If there is one thing we would do if we had more latitude would be to invest more. As long as the company holds it’s leadership position as smartphones go to mass adoption… You look to CTIA, and you see that these things are doing a lot more things a lot faster than anyone ever expected. I’m not going to knowingly avoid that growth, when our leadership position is worth MORE now because of it.

Note: these questions are mildly paraphrased composites from Jim Balsillie’s statements during the Investor Conference Call. We tried to be as accurate as possible, but let’s see you live blog any faster.