RIM shares rally as new BlackBerry inspires hope
By Euan Rocha
TORONTO (Reuters) - Shares of Research In Motion rose more than 5 percent on Wednesday after the struggling BlackBerry maker announced better-than-expected subscriber numbers and assured wary investors its new smartphone will go on sale in early 2013.
Waterloo, Ontario-based RIM will announce quarterly results on Thursday and analysts had expected the company, for the first time in its history, to report that it had started to lose subscribers. But at a developer event on Tuesday, RIM said its subscriber base grew by 2 million in the quarter ended Sept 1.
That took analysts by surprise as RIM's aging line-up of BlackBerry devices has been losing ground rapidly to Apple's iPhone and Samsung's line of Galaxy products in the key North American and European markets.
"Overall that is a promising performance given RIM's lackluster portfolio of smartphones," Scotiabank analyst Gus Papageorgiou said in a note to clients. "We believe largely all of these subscribers came from outside North America as the company continues to lose ground in that market."
RIM shares rose 37 cents, or 5.6 percent to $6.97 in midday trading on the Nasdaq on Wednesday. The stock, which had been hovering around nine-year lows, had already risen almost 5 percent on Tuesday.
RIM is trying to reinvent itself through a line of revamped smartphones that will run on its new BlackBerry 10, or BB10 operating system, on which the company has staked its future.
In an attempt to create a buzz around the new devices, Chief Executive Thorsten Heins gave a preview of the smartphone and its features to app developers at an event on Tuesday in San Jose, California.
In a note to clients, Cormark analyst Richard Tse said RIM struck the rights chords at the event, but cautioned that it is hard to evaluate how well the BB10 devices will work in real world conditions until they are on the market. Continued...