RIM shares pounded on subscriber worries

December 21, 2012
Shares of BlackBerry maker Research In Motion plummeted on the Nasdaq exchange on investor fears that its new smartphone platform will thin the ranks paying for its service.

Shares of BlackBerry maker Research In Motion plummeted Friday on the Nasdaq exchange on investor fears that its new smartphone platform will thin the ranks paying for its service.

RIM's lost more than a fifth of its value after the opening bell in New York, plummeting to $11.15 a share by late afternoon.

The decline came a day after the Canadian company reported its first-ever decline in smartphone service subscribers, with the number slipping by a million to 79 million in the that ended December 1st.

Analysts and investors are worried that RIM might lose even more subscribers after it rolls out a new BB 10 platform and touch-screen smartphones to stop Apple iOS and from devouring the mobile gadget market.

The success of the long-awaited BB 10 platform set to launch in January is seen as key to preventing RIM smartphones and tablets from becoming footnotes in the age of tapping into the Internet on the move.

While touch-screen smartphones might be more in tune with people's tastes than the trademark BlackBerry keyboards, the BB 10 platform makes subscribing to the company's profitable service optional.

Companies using the current BlackBerry platform pay monthly fees for to be part of a RIM network known for security so high that some governments have complained of being unable to pry into .

Service fees reportedly made up more than a third of the revenue taken in by RIM in the recently-ended quarter.

In an earnings call with analysts on Thursday, RIM executives said that BlackBerry service fees would be "under pressure" with the new platform and declined to speculate how it would play out.

National Bank Kris Thompson expected investors to "punish" RIM shares until the company provided better guidance regarding how the new platform would affect profits.

RIM on Thursday reported a small profit after three consecutive quarterly losses, offering some optimism for the struggling smartphone maker.

The firm posted a net profit of $9 million in the quarter.

That profit compared with a loss of $235 million in the second quarter and a gain a year ago of $265 million.

Revenue for the quarter was $2.7 billion, down five percent from $2.9 billion in the previous quarter and a slump of 47 percent from $5.2 billion in the same quarter of fiscal 2012.

The results were better than most analyst predictions.

The new BB 10 platform is to be launched January 30, and is seen as the last hope for Ontario-based RIM to regain some of its former luster.

A report by IHS iSuppli this week said BlackBerry will see its market share fall to five percent in 2012, from 11 percent in 2011.

Explore further: RIM down over 21 percent on Wall Street

Related Stories

RIM down over 21 percent on Wall Street

June 17, 2011

Shares in Research in Motion plunged on Wall Street Friday after the BlackBerry maker lowered its outlook for the year and said it would be cutting jobs.

RIM shares fall on disappointing results

September 15, 2011

Shares in Research In Motion (RIM) fell sharply in after-hours trading on Thursday after the BlackBerry maker said it shipped fewer smartphones and tablet computers than expected in the quarter.

RIM shares soar on Icahn stake reports

September 27, 2011

Shares of Research In Motion rose sharply on Wall Street on Tuesday amid speculation that billionaire US investor Carl Icahn has taken a stake in the troubled BlackBerry maker.

BlackBerry maker RIM's stock rebounds after results

September 29, 2012

BlackBerry maker Research in Motion's stock rallied sharply Friday a day after reporting a narrower-than-expected loss, as analysts debated whether the smartphone maker is poised for a rebound.

RIM loses BlackBerry subscribers for first time (Update)

December 20, 2012

BlackBerry-maker Research In Motion, which is already struggling with plunging sales, said Thursday it lost subscribers for the first time in the latest quarter, as the global number of BlackBerry users dipped to 79 million.

Recommended for you

Team develops targeted drug delivery to lung

September 2, 2015

Researchers from Columbia Engineering and Columbia University Medical Center (CUMC) have developed a new method that can target delivery of very small volumes of drugs into the lung. Their approach, in which micro-liters ...

Team creates functional ultrathin solar cells

August 27, 2015

(Phys.org)—A team of researchers with Johannes Kepler University Linz in Austria has developed an ultrathin solar cell for use in lightweight and flexible applications. In their paper published in the journal Nature Materials, ...

Magnetic fields provide a new way to communicate wirelessly

September 1, 2015

Electrical engineers at the University of California, San Diego demonstrated a new wireless communication technique that works by sending magnetic signals through the human body. The new technology could offer a lower power ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

VendicarD
not rated yet Dec 22, 2012
Don't worry. Be happy. Everything is fine. Work brings freedom.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.