RIM shares slump as service revenue, subscriber concerns weigh
Research In Motion (RIM) shares tumbled more than 10% on Thursday after the company reported the first ever decline in its subscriber numbers and outlined plans to transform the way it charges for its BlackBerry services.business Updated: Dec 21, 2012 22:52 IST
Research In Motion (RIM) shares tumbled more than 10% on Thursday after the company reported the first ever decline in its subscriber numbers and outlined plans to transform the way it charges for its BlackBerry services.
RIM, which hopes to revive its fortunes and reinvent itself via the launch of a brand new line of BlackBerry 10 devices next month, caught investors off-guard on its quarterly conference call, when it said it plans to alter its service revenue model - a move that will pressure the high-margin business that accounts for about a third of RIM's sales.
Those subscribers who need enhanced services like advanced security will pay for these services, while those who do not use such services will generate much lower to no service revenue, RIM chief executive Thorsten Heins said.
The news startled investors, who had earlier in the evening pushed RIM's stock more than 7% higher in post-market trading, after the company reported a narrower-than-expected quarterly loss and said it boosted its cash cushion ahead of next month's crucial launch of the BlackBerry 10 smartphone.
RIM's stock ended 9% lower at $12.9 in trading after the closing bell.