independent

Thursday 17 April 2014

RIM loses BlackBerry subscribers

Thorsten Heins, President and CEO of Research in Motion (AP/Eric Risberg)

Research In Motion's stock plunged in after-hours trading after the BlackBerry maker announced plans to change the way it charged fees.

RIM also announced that it lost subscribers for the first time in the latest quarter, as the global number of BlackBerry users dipped to 79 million.

But in a rare positive sign, the Canadian company added to its cash position during the quarter as it prepared to launch new smartphones on January 30. The new devices are deemed critical to the company's survival.

RIM's stock initially jumped more than 8% in after-hours trading on that news, but then fell 1.48 dollars, or 10.4%, to 12.65 after RIM said on a conference call that it would not generate as much revenue from telecommunications carriers once it released the new BlackBerry 10 platform.

RIM is changing the way it charges service fees, putting an important source of revenue at risk. RIM chief executive Thorsten Heins said only subscribers who wanted enhanced security would pay fees under the new system.

"Other subscribers who do not utilise such services are expected to generate less or no service revenue," he said. "The mix in level of service fees revenue will change going forward and will be under pressure over the next year during this transition."

RIM's stock had been on a three-month rally that has seen it more than double from its lowest level since 2003.

Three months ago RIM had 80 million subscribers. Analysts said the loss of a million subscribers was expected. Once coveted symbols of an always-connected lifestyle, BlackBerry phones have lost their lustre to Apple's iPhone and phones that run on Google's Android software.

RIM is banking its future on its much-delayed BlackBerry 10 platform, which is meant to offer the multimedia, internet browsing and apps experience that customers now demand.

"We believe the company has stabilised and will turn the corner in the next year," Mr Heins said. He noted that the company's cash holdings grew by 600 million dollars in the quarter to 2.9 billion dollars, even after the funding of all its restructuring costs. RIM previously announced 5,000 redundancies this year.

Press Association

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