Yahoo Finance Blackberry Hit By First Subscriber Fall
Blackberry maker Research In Motion (RIM) has confirmed its first ever decline in subscriber numbers as its smartphones struggle to compete with the likes of Apple (NasdaqGS: AAPL - news) and Samsung.
The news, which followed two high profile service failures for Blackberry users in the past 14 months, was contained in its third quarter results.
But that grim statistic was largely overshadowed by a sharp fall in its share price, sparked by a separate announcement from RIM Chief Executive Thorsten Heins.
He surprised investors in a conference call when he announced that RIM was to transform the way it charges for its BlackBerry services by altering its service revenue model - a move he admitted would pile pressure on a business that accounts for about a third of RIM's sales.
The company, which is pinning a revival in its fortunes on the launch of a brand new line of BlackBerry 10 devices on January 30, said subscribers who need enhanced services like advanced security would pay for them, while those who do not use such services would generate much lower to no service revenue.
Its share price, which had risen on the back of news of a better than expected cash pile contained in the results, slumped 10%.
Mr Heins had said: "I want to be very clear on this. Service revenues are not going away, but our business model and service offerings are going to evolve ... The mix in level of service fees revenue will change going forward and will be under pressure over the next year," cautioned Heins.
Analysts also expressed concern about the decline in RIM's subscriber base which tumbled by one million to 79 million during the quarter as it shipped almost seven million smartphones.
But it was encouraging, they said, that RIM had $2.9bn (£1.8bn) in available cash to manufacture and promote the Blackberry 10.
RIM is counting on the new line to claw back market share lost in recent years to the likes of Apple's iPhone and a slew of devices powered by Google (NasdaqGS: GOOG - news) 's Android operating system.
Ontario-based RIM had previously said it had received positive feedback from developers and people testing the Blackberry 10 devices.
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