RIM feels pinch as BlackBerry users’ drop

BlackBerry-maker Research In Motion (RIM) lost 1 million users in the last quarter alone, the worst attrition in the device’s history, with its net income dropping to just $9 million after a $114 million loss in the third quarter.


RIM blames the drop partly on its reduced subscription fees, which account for 36 percent of revenue in a bid to keep its products competitive. This comes as the company is expected to avail various products that will not generate user fees.

Experts have attributed the drop in customer base to increased competition from the Android and the iOS platform, even as the RIM said it plans a comeback with BlackBerry 10.

The company also saw its targeted sales in developing markets below par with the United States, its main market, experiencing slow sales. It is however optimistic that the BlackBerry 10 will particularly attract more users.

To this end, RIM says its banking sales especially with governments and corporate. Already, it has said it will dig in into its cash reserves to ensure that there are enough stocks of the BlackBerry 10 with enough money also set aside for advertising and marketing campaigns of the reserves.

“We are realistic about our competitors, but we know that customers in this industry demand and respond to innovation,” said RIM’s chief executive Thorsten Heins.

In November this year, Heins said that consumer BlackBerry 10 models would no longer benefit from its chief service the RIM’s special compression technology.

With the reduced profits, RIM’s shareholders will only earn 2 cents per share, compared to 51 cents a year ago. Following the announcement, RIM’s shares fell by 9 percent in afterhours trading.

Posted in: Mobile

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