BlackBerry 10 Changes to Service Fees Spook Wall Street
RIM officials announced that with the arrival of BlackBerry 10, the company plans to "evolve" its business model and service offerings.During Research In Motion's Dec. 20 earnings call, officials announced that with the arrival of the long-awaited BlackBerry 10 mobile platform, they will make changes to the company’s service revenue model. The changes will reflect customers' different usage models, said CEO Thorsten Heins, and RIM plans to offer a "range of security, mobile device and application management services in addition to communication services." During RIM's fiscal 2013 third quarter, services accounted for 36 percent of its $2.7 billion in revenue. Heins went on to explain:
I want to be very clear on this. Service revenues are not going away, but our business model and service offerings are going to evolve. Our vision is to position BlackBerry as the clear leader in the enterprise mobility market. While the mix and level of service fees revenue will change going forward, and will be under pressure over the next year during this transition, we are targeting to grow service revenue in smartphones, tablets and embedded application to a new offering with new partners and across platforms other than BlackBerry 10. We're making these changes to meet the competitive dynamics of the marketplace, but more importantly to allow us to pursue the broad opportunities in mobile computing that BlackBerry 10 and our infrastructure enables us to do.
We feel our strategy will have broadened the BlackBerry ecosystem over time and will allow application developers and other potential partners access to a broader subscriber market. This is an exciting time for our company. Yes, it's challenging, too, and there are many things we continue to work on in execution. But we believe the company has stabilized and will turn the corner in the next year.