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Research in Motion saw its shares continue the climb that began earlier this week after it posted a Q2 earnings report that beat analyst expectations, but the struggling BlackBerry maker's revenue disappointed once again and its losses continue.

On Wednesday, RIM's stock price was buoyed by optimism about its upcoming BlackBerry 10 platform, as well as news that the overall number of BlackBerry users has topped 80 million, a new record.

Still, during Thursday's earnings conference call, CEO Thorsten Heins was careful to acknowledge that investors' concerns about the ailing company were at least somewhat justified. "We recognize that our results in the second quarter are still well below where they need to be," he said.

Revenues for the quarter were $2.9bn, up 2 per cent from Q1. But that was certainly nothing to crow about, as they were down 31 per cent from the $4.2bn RIM brought in during the same period the previous year.

According to RIM CFO Brian Bidulka, hardware accounted for 60 per cent of that income, while revenue from service fees made up 35 per cent and software and other revenue rounded out the rest.

Bidulka added that while RIM's service revenues were essentially flat, it has been seeing the same trend that many wireless carriers have reported, in which customers have been moving from top-tier unlimited subscription plans to prepaid plans, which offer lower margins for the carrier.

In all, RIM posted a net loss of $235m for the quarter, or 45 cents per share. That was better than last quarter's calamitous $518m beating, to be sure, but losses are losses. A year ago, RIM actually earned $329m for the quarter, or 65 cents a share, but there's little hope we'll see performance like that again until it can get its first BlackBerry 10 devices out the door.

Meanwhile, sales are sagging. RIM shipped approximately 7.4 million BlackBerry smartphones in the three months ending September 1, down 5 per cent from the previous quarter and down 30 per cent from the previous year's Q1. Last year, the Canadian company managed to shift between 10 million and 14 million phones each quarter.

On a positive note, if BlackBerrys aren't selling, at least they aren't sitting on shelves gathering dust quite as much either. RIM has managed to whittle its inventory from the staggering $1bn it reported in the first quarter down to $785m – a 21 per cent reduction – which Bidulka attributes to faster turnover and improvements in RIM's supply-chain processes.

So where are all these new BlackBerry subscribers coming from, then? According to Heins, around 58 per cent of RIM's sales in the quarter were made outside the US, UK, and Canada, with particular growth in South Africa, Venezuela, and the Asia-Pacific region, Indonesia especially.

Many of those customers are on the lower end of the market. When pressed, Heins admitted that such customers are likely to continue to purchase low-cost BlackBerry 7 devices, even after the BlackBerry 10 launch. In fact, he said, if sales in these markets remain strong, we might even see RIM launch new products running BlackBerry 7 in the same timeframe as the BlackBerry 10 roll-out.

"Make no mistake, BlackBerry 7 is a very strong smartphone OS and we intend to support it for some time to come, and also make sure that we have a really competitive, attractive entry-level position based on BlackBerry 7," Heins said.

For RIM to win back its market position in the more lucrative, high-end smartphone markets, however – including the US, UK, Canada, and potentially China – everything depends on BlackBerry 10. Heins said RIM plans to be "relentless" in ensuring that BlackBerry 10 will be a success, although no devices are due to ship until the first calendar year of 2013.

Will RIM survive that long? On this score, there was a glimmer of hope. Further losses for the BlackBerry maker are almost assured, but its reserves of cash, cash equivalents, and short- and long-term investments actually increased in Q2 by about $100m, to a total of $2.3bn. RIM may be all-in on its BlackBerry 10 gamble, but it's playing the long game. ®

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