RIM: No seasonal dip in subscriber growth

Research In Motion Ltd. said today that its subscriber growth will be stronger than previously forecast for its fiscal quarter ending March 1. But the BlackBerry maker did not raise its financial projections for the same period.
RIM in December had predicted 1.8 million new subscribers in the quarter, a number it raised today by 15% to 20%.
Analyst Maynard Um at UBS said the disparity between high subscriber growth and conservative financial guidance may reflect “inventory burn” as handset supplies had built up during the brisk holiday retail season. Analyst Ittai Kidron at Oppenheimer made a similar point, adding that RIM could also be giving conservative financial guidance with an eye to exceeding it or that the upgrade cycle to higher margin handsets is slower than anticipated.
Whichever explanation carries the day, Kidron added that “the implications are clear — smartphones are gaining material traction and RIM is not seeing any slowdown in demand due to the weak macro environment.”
RIM’s stock was up 10% on the news to around $106 per share.
Cross-licensing issues
Meanwhile, more details emerged in the lawsuits filed simultaneously on Feb. 16 by Motorola Inc. against RIM and vice versa.
Talks over re-negotiating a cross-licensing agreement first signed in March 2003 and expired Dec. 31, 2007, apparently broke off as recently as Feb. 8, with lawsuits flying a week later. The legal actions reveal how closely tied competitors often become through the mutual use of each other’s patents. And the lawsuits reflect how vociferous competitors’ differences can become as they re-evaluate the value of their patents in an attempt to negotiate fresh agreements.
The rivals’ suits appear to anticipate each other’s claims, apparently a reflection of the well-structured, point-by-point negotiations that ended in a mutual decision to take the issues to court.
In U.S. District Court for Delaware, Motorola claimed in a 6-page suit that it is either licensed to use or does not infringe on five of RIM’s patents and asked that the court reject RIM’s claims to the contrary. In U.S. District Court for the Eastern District of Texas, Motorola claimed in an 11-page filing that RIM has infringed on seven of its own patents and requested a permanent injunction against RIM’s use of such patents, plus damages.
RIM’s 61-page salvo, filed in U.S. District Court for the Northern District of Texas, claimed nine patent violations by Motorola, as well as the latter’s “continuing pattern of unfair and anticompetitive conduct” on licensing its own patents. The “anticompetitive conduct” charge relates to RIM’s contention that Motorola is bound by the rules of standards-setting bodies to license its patents on fair, reasonable and non-discriminatory (FRAND) terms. (Motorola, in a later statement, denied that its patents were governed by FRAND terms.)
RIM sought the court’s vindication for its own patent claims, compensation for Motorola’s alleged infringement and a ruling that Motorola is indeed bound by FRAND terms on licensing its patents to RIM.
RIM further attempted to establish, in its filing, that in the direct competition between the two companies in the smartphone/enterprise business, Motorola had failed to gain traction, is using RIM patents unlawfully and is violating FRAND terms to make its own patents unaffordable to RIM and, thus, stifle competition.
“Having suffered losses in the marketplace, Motorola has now resorted to demanding exorbitant royalties from its competitor, RIM,” RIM’s complaint said, in part.
RIM asked that the court support FRAND licensing terms for Motorola’s patents, that Motorola has waived its right to injunctive relief by contributing certain patents to essential technology standards and for damages for Motorola’s alleged violations of RIM’s patents. RIM asked that the barring of injunctive relief be extended to the U.S. International Trade Commission, perhaps anticipating that the American vendor might use the ITC forum against the Canadian vendor.
No word yet on when the various charges will be heard in court.