RIM hopes to bully suppliers to reduce prices

Research In Motion wants to reduce supply costs to boost margins, and RIM co-CEO Jim Balsillie said that the BlackBerry maker's recent growth will allow the company to do so. 

"Being a strong growth company in a challenging environment makes you an important customer," co-CEO Jim Balsillie said in an interview with Bloomberg News. Balsillie said he thinks RIM's position will allow it to successfully push its suppliers to lower their prices.

RIM posted stronger-than-expected results for its fiscal fourth quarter, with profits of $518.3 million, up from $412.5 million in the year-ago period. RIM had revenue of $3.46 billion, up from $1.88 billion a year earlier and above analyst estimates of $3.40 billion.

Despite the positive quarterly numbers, RIM's profit margin dipped significantly--down to 40 percent from 51.4 percent a year earlier--likely due to the expense of subsidizing high-end devices such as the Bold and Storm. RIM said it expects gross margins to expand this quarter, which may be a nod to new sources of revenue such as its new BlackBerry App World application store.

For more:
- see this Bloomberg article [1]

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