Research in Motion Earnings Call Nuggets: Installed Base, BlackBerry 10 Target Audience

On Thursday, Research in Motion Ltd (NASDAQ:RIMM) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Installed Base

Richard Kramer – Arete: Thorsten, you’ve got a big install base around the world entry-level devices out there. Can you lay out for us how quickly it’s realistic to expect BlackBerry 10 to address the low end of the market, where I assume it’s the bulk of your 80 million subscribers or are you going to introduce another wave of BlackBerry 7 devices to those customers? Also maybe, Brian, could you shed a bit of light on the comments about impact from pressures by customers to reduce RIM’s monthly infrastructure access fees and maybe give us an update on status and negotiations around those fees, given that expected BB 10 won’t use the RIM (indiscernible) in the same way as BB 7 does?

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Thorsten Heins – President and CEO: Happy to answer your question, Richard. So as far as the installed base is concerned, we always have a product mix in those markets range from high to entry-level and we just have introduced two new products in the entry level, the 9220, 9320; which actually get very good feedback. BlackBerry 10 will proliferate into the mid-tier probably by fall this year, and we are working on a concept for an entry level. However, we feel very strong about BlackBerry 7 in that segment, so you might see actually even a new product based on BlackBerry 10 in the entry level coming out in next year.

Brian Bidulka – CFO: And the question on the infrastructure charges, so, certainly we are seeing a lot of the – some of our subscribers moving from the higher-tier unlimited plans into the lower-tier plans and that is having an impact on our ARPU like I mentioned in the remarks.

BlackBerry 10 Target Audience

Todd Coupland – CIBC World Markets: I was wondering if you could give us an idea of the 80 million subscribers that you have. What’s your sense on how much of that can upgrade to BB10 in the first few quarters following the launch?

Thorsten Heins – President and CEO: I don’t have the exact quantitative data, but for sure there is certain audiences that we target with BlackBerry 10 when we launched it; certainly, the ones that are up for a contract renewal that kind of fit into this price band and this segment of BlackBerry 10. Second, we believe that with the strength of the BlackBerry 10 product we actually can also win market share back from other competitors. Third, don’t forget that the market today is at 30% of smartphone penetration in average, so we are pretty confident that if you think about the people moving from feature phone to smartphones that can also catch a significant share of these because we are really providing BlackBerry 10 a whole new user experience and that’s why we run a big global market campaign driven by (Frank Boulben) and you will see more to really have a global launch and actually go after these three segments in apparel in a global launch procedure.