The numbers, while impressive, are mostly in line with expectations. About 81 percent of revenue came from sales of devices; 13 percent came from service, 2 percent from software, and 4 percent from other businesses. Gross margins were strong at 43.6 percent -- better than the 40 percent margins in its fourth quarter.
RIM also said it shipped 7.8 million BlackBerrys and added another 3.8 million BlackBerry subscribers, slightly below expectations, to bring its total subscribers to nearly 29 million and giving it a 55 percent share of the smartphone market in the U.S., according to IDC estimates.
"The industry leading BlackBerry product portfolio is driving strong customer demand around the world, and our penetration of new market segments continues to expand," said Jim Balsillie, RIM's co-CEO. "We are particularly excited about the strength of our product portfolio for fiscal 2010, and we are looking forward to driving continued growth and profitability in our business throughout the remainder of the year."
That all seemed like good news. Yet shares of RIMM, up about 90 percent year-to-date, fell more than 5 percent in after-hours trading. Why? Inflated expectations. Looking forward, the company's second-quarter forecast was also in line with Wall Street expectations, and investors clearly want the company to beat expectations. RIM said it expects to generate earnings of 94 cents to $1.03 per share on revenue of $3.45 billion to $3.7 billion in sales.
But investors do have other reasons for worry. RIM has long dominated the smartphone market, but pressure is increasing from the Apple (AAPL), which launches its new iPhone 3G S on Friday, and the Palm (PALM) Pre, which went on sale this month. Plus, Google's (GOOG) Android phone and Samsung (SSNLF), as well as smart phones from Nokia (NOK), are all vying for a piece of the pie.
To keep the stock rising, RIM will need to fight off competition; the BlackBerry Tour 9630 is one new weapon in its arsenal, but the company will have to introduce other products this year. RIM says it will sell between 8.1 million and 8.7 million BlackBerrys in its second quarter.