OTTAWA: Research In Motion said Thursday that a million BlackBerry
owners worldwide stopped using their phones during the company's most
recent financial quarter, the first such decline in the device's
history.
It reported other bad news as well, a month before introducing its new BlackBerry 10 phones to the public. Revenue fell 48 per cent in the company's fiscal third quarter, ended Dec. 1, to $2.7 billion from $5.2 billion a year earlier.
After a favorable tax gain, RIM reported net income of $9 million or 2 cents a share. A year ago during the same period, RIM earned $265 million, or 51 cents a share. The company said that using nonstandard accounting methods to adjust for the tax gain and other pretax charges led to an adjusted net loss for the third quarter of $114 million, or 22 cents per share.
Analysts had expected a loss of 35 cents a share, according to a survey by Thomson Reuters. Nevertheless, RIM's shares fell about 9 per cent in after-hours trading. Before RIM's announcement, shares closed at $14.12, up for the day by 3.6 per cent.
The company has pinned its hopes on the BlackBerry 10 to win back customers who may have defected to iPhones or phones using Google's Android operating system. RIM said 79 million customers are using BlackBerry devices.
"We believe the company has stabilized and will turn the corner in the next year," Thorsten Heins, the chief executive, said in a conference call with analysts. "We are realistic about our competitors, but we know that customers in this industry demand and respond to innovation."
Until now, RIM had been able to offset the drastic drop in the BlackBerry's popularity in its traditional markets, particularly the United States, through increased sales in developing countries. Because every BlackBerry user generates high-margin monthly fees from carriers for RIM, the most recent quarter's loss of subscribers is more than just a symbolic setback.
In the conference call, Heins indicated that RIM had been reducing those fees, which account for 36 per cent of RIM's revenue, in a bid to keep BlackBerry's current product offerings alive. And in an announcement that seemed to concern some analysts on the call, Heins said that the new BlackBerry 10 phones would substantially revamp how RIM set service fees.
With BlackBerry 10, Heins said, corporate and government users would be able to choose what services they purchase from RIM, a step that he said could mean that some of them would no longer generate user fees. The company was unclear about what fees BlackBerry 10s sold to consumers would produce. Last month, Heins said that consumer BlackBerry 10 models would no longer benefit from RIM's special Web compression technology, the chief service provided to consumers by RIM.
It reported other bad news as well, a month before introducing its new BlackBerry 10 phones to the public. Revenue fell 48 per cent in the company's fiscal third quarter, ended Dec. 1, to $2.7 billion from $5.2 billion a year earlier.
After a favorable tax gain, RIM reported net income of $9 million or 2 cents a share. A year ago during the same period, RIM earned $265 million, or 51 cents a share. The company said that using nonstandard accounting methods to adjust for the tax gain and other pretax charges led to an adjusted net loss for the third quarter of $114 million, or 22 cents per share.
Analysts had expected a loss of 35 cents a share, according to a survey by Thomson Reuters. Nevertheless, RIM's shares fell about 9 per cent in after-hours trading. Before RIM's announcement, shares closed at $14.12, up for the day by 3.6 per cent.
The company has pinned its hopes on the BlackBerry 10 to win back customers who may have defected to iPhones or phones using Google's Android operating system. RIM said 79 million customers are using BlackBerry devices.
"We believe the company has stabilized and will turn the corner in the next year," Thorsten Heins, the chief executive, said in a conference call with analysts. "We are realistic about our competitors, but we know that customers in this industry demand and respond to innovation."
Until now, RIM had been able to offset the drastic drop in the BlackBerry's popularity in its traditional markets, particularly the United States, through increased sales in developing countries. Because every BlackBerry user generates high-margin monthly fees from carriers for RIM, the most recent quarter's loss of subscribers is more than just a symbolic setback.
In the conference call, Heins indicated that RIM had been reducing those fees, which account for 36 per cent of RIM's revenue, in a bid to keep BlackBerry's current product offerings alive. And in an announcement that seemed to concern some analysts on the call, Heins said that the new BlackBerry 10 phones would substantially revamp how RIM set service fees.
With BlackBerry 10, Heins said, corporate and government users would be able to choose what services they purchase from RIM, a step that he said could mean that some of them would no longer generate user fees. The company was unclear about what fees BlackBerry 10s sold to consumers would produce. Last month, Heins said that consumer BlackBerry 10 models would no longer benefit from RIM's special Web compression technology, the chief service provided to consumers by RIM.
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