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RIM surprises analyst, investors by booking 18% rise in sales

BlackBerry maker Research in Motion has reportedly bounced back 18%  higher in sales during today’s afterhours trading. The company suffered low sales previously, announcing a 31% dive in overall sales last year.

During the second quarter of this fiscal year, RIM declared a total loss of $235 million on sales of $2.9 billion, translating to 45 cents per share. It booked a profit of $329 million during the same quarter last year.

Despite the loss, RIM’s performance still beats predictions led by Thomson Reuters. Wall Street estimates expected a 46-cent-per-share on sales of $2.5 billion loss.

Many analysts and investors alike wonder whether the BlackBerry 10 operating system, believed to be released this year, can turn the company’s fortune around. However, in June, RIM revealed that BlackBerry 10 would be released in 2013, probably during the first quarter. Many think if RIM could even survive long enough to release new gadgets in the near future.

Significant the new OS it may seem to the company, RIM only mentioned it once during its financial results release.  RIM’s CEO Thorsten Heins has a realistic view about the new mobile OS when he said: “Make no mistake about it, we understand that we have much more work to do.” Heins also confirmed during last Thursday’s conference that BlackBerry 10 cannot fail the company and that RIM will try to ensure its success. He also revealed some rollout plan about it, including price ranges of device that will launch the new operating system. Entry-level phones running the OS will come out next year.

RIM increased its capital last quarter to $2.3 billion, a $100-million increase from the previous quarter. Also, BlackBerry’s suscribers grew from 2 million during the past three months to 80 million around the world.

The company dissected sales percentages for each sector, with hardware making up the 60%, service revenue at 35%, and software at 5%.

While hardware shows the biggest sales percentage overall, RIM only sold a total of 7.4 million BlackBerry phones and around 130,000 PlayBook tablets during the second quarter. This while everyone else inclusing Nokia, Microsoft, Apple, and Samsung has released new gadgets.

The main cause of RIM’s woes is the loss of sales to corporate clients, an arena BlackBerry devices once dominated. Instead of using BlackBerry’s gadgets and services, many employers are now opting to use other devices like Apple’s iPhones and Google’s Android devices.

source: cnn