Shares of Research In Motion (RIM) dropped over 16 percent during Friday morning trading – apparently in part from fears over a new fee structure.The fees would likely impact the Canadian company’s services segment – which “has long been RIM's most profitable [segment] and accounts for about a third of total revenue,” Reuters reported.
Service revenues are the fees RIM charges customers for using the company's proprietary network, according to The Wall Street Journal.
On Thursday, RIM revealed stronger-than-expected quarterly results – which faded under news about the new fees.The fees will come as the company finally introduces BlackBerry (News - Alert) 10 on Jan. 30.
In an effort to convince investors, RIM CEO Thorsten Heins said RIM's "service revenue isn't going away. We're not stopping. We're not halting. We're transitioning."
He also expressed confidence in the company’s future. "We believe the company has stabilized and will turn the corner next year," Heins said in a conference call statement, quoted by The Journal.
Company shares dropped 16.7 percent to $11.76 as of late Friday morning trading on the Nasdaq, Reuters (News - Alert) reported.
“Even after Friday morning's drop, the stock was still more than 90 percent higher than it was three months ago,” Reuters added.
Nevertheless, Canaccord Genuity analyst Michael Walkley was not positive about the company’s future in a statement to Reuters."We believe RIM will eventually need to sell the company," Walkley said.
In addition, RIM reported it had some one million fewer BlackBerry subscribers in the most recent quarter, The Journal said. RIM now has 79 million subscribers worldwide.
Much rests on the success of BlackBerry 10. Heins has said that BlackBerry 10 is the company’s "most important launch ever.” He predicts that RIM, via BlackBerry 10, could reach the number three smartphone spot after Google's Android operating system and Apple's iPhone (News - Alert), according to a report on TMCnet.
Edited by Jamie Epstein