RIM loses BlackBerry subscribers

RIM loses BlackBerry subscribers for the first time

  

 BlackBerry maker Research In Motion (RIM) has announced that it lost subscribers for the first time in the latest quarter, as the global number of BlackBerry users dipped to 79 million.

Three months ago, RIM had 80 million subscribers. Analysts said the loss of 1 million subscribers was expected. Once coveted symbols of an always-connected lifestyle, BlackBerry phones have lost their luster to Apple's iPhone and phones that run on Google's Android software.

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.

Shares of the company were hit last week in after-hours trading after the BlackBerry maker said it plans to change the way it charges fees.

RIM's stock initially jumped more than 8 per cent on Thursday in after-hours trading on the news, but then fell $1.48, or 10.4 per cent, to $12.65 after RIM said on a conference call that it won't generate as much revenue from telecommunications carriers once it releases the new BlackBerry 10 platform.

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

RIM is changing the way it charges service fees, putting an important source of revenue at risk.

RIM CEO Thorsten Heins has said only subscribers who want enhanced security will pay fees under the new system.

"Other subscribers who do not utilise such services are expected to generate less or no service revenue," Heins 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 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," Heins said. He noted that the company's cash holdings grew by $600 million in the quarter to $2.9 billion, even after the funding of all its restructuring costs. RIM previously announced 5,000 layoffs this year.

Heins said subscribers in North America showed the largest decline, but said there is growth overseas.

RIM posted net income of $14 million, or 3 cents per share for its fiscal third quarter, which ended December 1. That compares with a profit of $265 million, or 51 cents per share, in the same quarter a year ago.

The latest figure includes a favorable tax settlement. Excluding that adjustment, RIM lost 22 cents per share.

RIM reported revenue of $2.7 billion, down 47 per cent from a year ago.