RIM surprises with smaller loss; new fee scheme

Research In Motion seems to have mixed up its holidays. Rather than giving investors a Christmas present on Wednesday, the BlackBerry maker instead invoked Halloween by spooking analysts with news that it’s revamping the way it will charge for services.

Chief executive Thorsten Heins said the company is looking at offering corporate customers a “menu” of services along with the upcoming BlackBerry 10 phones, rather than taking a “one-size fits all” approach with email and security like it has until now.

Those service revenues, which are collected by carriers and passed on to RIM, amounted to 36 per cent of the company’s revenue in the most recent quarter, so analysts were understandably concerned.

RIM executives declined to specify how those charges could be carved up or changed in a conference call Wednesday evening, but they did say that it will be a necessary move to retain customers. Some businesses, after all, only want the phones without the attached services.

Other than that particular bit of tricking or treating, the Waterloo, Ont.-based company reported slightly better than expected results for its third quarter ended Dec. 1.

A Thomson Reuters’ survey of analysts had forecast a loss of 35 cents a share on revenue of $2.66 billion, with the company sitting on 80 million subscribers and cash of $2.3 billion.

In almost all those measures, the BlackBerry maker surpassed expectations. Revenue for the quarter came in at $2.7 billion or slightly above what analysts were expecting.

The per-share loss was also less painful than expected, at only 22 cents, with the company also announcing that cash on hand climbed to $2.9 billion.

But then there’s the bad news. Not only did total subscribers slip to 79 billion, those above numbers also highlight the atrocious year that RIM has had. Quarterly revenue was down 47 per cent from a year earlier, when the company posted an adjusted profit of $1.27 per share. How quickly things can change.

Outlook positive

RIM executives can’t be done with 2012 fast enough, with the light at the end of a disastrous year coming on Jan. 30, when the new, all-touch-screen BlackBerry 10 device will make its long-awaited debut. It’ll be followed shortly thereafter by a QWERTY keyboard model.

Heins was understandably forward-looking in his comments.

“We were pleased we were able to maintain a stable subscriber base during this transition period,” he said. “We are in a very strong position to reinvent our platform.”

In demos over the past few weeks, it became clear that the new BB10 operating system is being aimed at business users, a direction Heins confirmed in the conference call. While RIM will also seek to make inroads with the wider consumer market, currently dominated by Apple and Android, it’s going to cater to its bread and butter.

While that might seem like a smart move, it also likely means that long-suffering shareholders will have to wait even longer before seeing any good news. With corporate buyers often taking a wait-and-see approach with their technology buying, RIM may not see big BB10 sales until later into 2013.

How many will have the stomach or the patience to keep waiting?