UPDATE 4-RIM shares dive as fee changes catch market off guard

Fri Dec 21, 2012 4:35pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* RIM CEO says service revenue not going away

* Analysts say new fee model may weigh on revenue, margins

* New BlackBerry 10 phones set to unveil in January

* Shares fall more than 20 percent following two-month rally (Updates to close)

By Allison Martell and Chandni Doulatramani

Dec 21 (Reuters) - Shares of BlackBerry maker Research In Motion Ltd plunged more than 20 percent on Friday on fears that a new fee structure for its high-margin services segment could put pressure on the business that has set the company apart from its competitors.

It was the stock's biggest, single-day, percentage price drop since September 2008. But shares were still nearly 80 percent above the year's low, which was reached in September. They started to rally in November as investors began to bet that RIM's long-awaited new BlackBerry 10 phones, which will be unveiled in January, would turn the company around.

The services segment has long been RIM's most profitable and accounts for about a third of total revenue. Some analysts said there was a risk that the fee changes could endanger its service ecosystem and leave the Canadian company as just another handset maker.

The fee changes, which RIM announced on Thursday after market close, overshadowed stronger-than-expected quarterly results. The company said the new pricing structure would be introduced with the BlackBerry 10 launch, expected on Jan. 30.   Continued...