Since Varney’s confirmation in late April, the Department of Justice has seen a sort of Trustbuster renaissance. The DOJ has begun inquiring into potentially anticompetitive recruiting practices in Silicon Valley. It opened an investigation into the Google Books (GOOG) settlement. And now, the Department is scrutinizing cellphone exclusivity deals like the lucrative one between Apple (AAPL) and AT&T (T). Sources close to the DOJ tell The Wall Street Journal that the agency is probing such deals to see if they adversely restrict consumer choice or hamper competition.

The inquiry, which is in its very early stages, follows recent calls for the Federal Communications Commission to open a similar investigation, and it remains to be seen what, if anything, will come of it. For while exclusivity deals may undermine consumers, there’s little doubt that they benefit them as well. After all, AT&T’s iPhone deal with Apple scared the hell out the entire industry, forcing innovations in handsets and networks alike. Were it not for that deal, we might not be seeing the network improvements now occurring–the deployment of high-speed downlink packet access and long-term evolution, or LTE, networks, for example. And we almost certainly wouldn’t have devices like the Palm (PALM) Pre and the BlackBerry Storm.

Wrong. According to market researcher NPD, the best-selling smartphone was Research in Motion’s (RIMM) BlackBerry Curve, which slipped past the iconic device in market share, bolstered by Verizon’s (VZ) Buy One, Get One promotion.

That deal, which ran from Feb. 6 to March 31, offered a second RIM handset of equal or lesser value with the purchase of any Blackberry and a two-year contract–an attractive proposition and one that many a consumer took the carrier up on. NPD says RIM’s consumer smartphone market share rose to nearly 50 percent in the first quarter, an increase of 15 percent. Meanwhile, Apple’s (AAPL) and Palm’s (PALM) shares both declined 10 percent. “Buy one, get one free” trumps “what are the handy things about the iPhone” every time.

NPD’s Top 5 rankings:

1. RIM BlackBerry Curve (all 83XX models)
2. Apple iPhone 3G (all models)
3. RIM BlackBerry Storm
4. RIM BlackBerry Pearl (all models, except flip)
5. T-Mobile G1

“Verizon Wireless’s aggressive marketing of the BlackBerry Storm and its buy-one-get-one BlackBerry promotion to its large customer base contributed to RIM capturing three of the top five positions,” Ross Rubin, director of industry analysis at The NPD Group said in a statement. “The more familiar, and less expensive Curve benefited from these giveaways and was able to leapfrog the iPhone, due to its broader availability on the four major U.S. national carriers.”

It’s not likely we’ll ever see a similar “buy one, get one” free deal from Apple for the iPhone, although if we did, one wonders how long the BlackBerry would be able to hold on to the top spot.

RIM (RIMM) expects earnings in the fourth quarter to be at the low end of its earlier target of 83 cents to 91 cents a share. An interesting data point to consider in light of the company’s claim that it had “record levels” of net subscriber additions during the month of December and predicts subscriber additions for the quarter ending Feb. 28 to be more than 20 percent higher than previously estimated.

“RIM achieved a very strong start to the holiday buying season and the momentum carried on stronger than expected during the past seven weeks despite a seasonally slower time frame and the challenging economic environment,” co-CEO Jim Balsillie said in a statement. “We are pleased with our leadership and momentum in the market after shipping our 50 millionth BlackBerry smartphone in January and introducing a range of new products that are achieving exceptional early results and helping attract record levels of new customers to the BlackBerry platform.”

Unfortunately for RIM, those “exceptional early results” and “record levels of new customers” don’t appear to be enough to ease investor concerns that its profits are waning. Shares in the company slid more than 17 percent in early trading today.

Though its launch was marred by software glitches and a chorus of middling-to-scathing reviews, Research in Motion’s (RIMM) high-profile smartphone, the BlackBerry Storm, has actually sold fairly well.

Certainly, it hasn’t stumbled as badly as some reports have suggested. Verizon (VZ) said this week that it’s sold one million Storm handsets since it began peddling them in the states on Nov. 21.

Now that’s a far cry from the one-million-sold-in-a-weekend, 2.4 million-in-a-quarter sales of Apple’s (AAPL) iPhone 3G (which, ironically, costs less to be build than the Storm), but it’s a decent figure nonetheless. And it suggests that perhaps the consumer market isn’t quite as appalled by the device as it has been portrayed to be.

Said Goldman Sachs analyst Simona Jankowski: “Our retail checks suggest that the Storm is Verizon’s best-selling smartphone, and the rate of returns is relatively low, contrary to recent market concerns and Internet blogs.”

Now, leaving aside for a moment the fact that the Storm is clearly not a laptop replacement, Lazaridis’s comment is interesting because it mirrors Apple (AAPL) CEO Steve Jobs’s remarks about the iPhone this past October. Responding to a question about Apple’s plans for the Netbook market, Jobs suggested that the iPhone and iPod touch are essentially diminutive Netbooks. “One of our entrants into [the Netbook] category, if you will, is the iPhone for browsing the Internet and doing e-mail and all the other things that a netbook lets you do,” Jobs said. “Being connected via the cellular net wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket.”

Great minds think alike, I guess…

As ChangeWave research director Paul Carton notes, “as we approach the 1st quarter, the ball has shifted back into BlackBerry’s court.” And that would seem to be the case. Sadly for RIM, middling customer satisfaction ratings for the Storm may undermine its broader adoption.

“The overall satisfaction rating given by new owners of the Blackberry Storm can, at best, be characterized as lukewarm,” says Carton. “One in three Storm owners (33 percent) said they were Very Satisfied with their new model, well below the 52 percent Very Satisfied rating given by all current owners of BlackBerry smart phones.” And that’s worth noting, because the first-generation iPhone’s Very Satisfied rating–77 percent–was more than double the Storm’s. Furthermore, the Storm’s Unsatisfied rating (14 percent) is three times that of the iPhone (five percent). So while the Storm would seem to have quite a bit of near-term potential, it’s long-term success could be hamstrung by poor reviews and unsatisfied customers.

A likely explanation. There’s little doubt the botched debut of the new Blackberry Storm undermined RIM’s performance this quarter. But perhaps there’s something more at work here as well–like the quality of RIM’s handsets themselves. “We think an additional factor is a poor reception to the much-anticipated Storm and Bold,” analysts at Deutsche Bank wrote in a client note. “We think the Storm has numerous flaws and the functionality of both devices is largely unchanged from previous devices.”

Consider this: Using the Storm botnet and 75,869 of its zombie members, researchers at UC Berkeley and UC San Diego broadcast 350 million pieces of spam peddling male enhancement supplements. All but 28 were ignored. “After 26 days, and almost 350 million e-mail messages, only 28 sales resulted,” the researchers explained. “Taken together, these conversions would have resulted in revenues of $2,731.88–a bit over $100 a day for the measurement period.”

That’s a conversion rate of well under 0.00001 percent. Laughable, right?

Not really. The supplements were priced at $100. And botnet overhead, as you might imagine, is quite low. Which means it’s entirely possible to turn a nice profit by managing just one sale per 12.5 million emails sent. Said the researchers, “Under the assumption that our measurements are representative over time, we can extrapolate that…Storm-generated pharmaceutical spam would produce roughly $3.5 million dollars of revenue a year.”