RIM Shares Take a Nosedive On News of New Service Plan Fees
RIM's share price fell nearly 23 percent heading into the weekend, ending the trading day at $10.91 on Friday. The sudden drop in share price is a knee-jerk reaction to RIM's announcement that it would lower prices on existing BlackBerry 7 devices and raise service fees it charges carriers in an effort to keep its subscriber numbers up.
The new pricing structure will be rolled out with BlackBerry 10, which is expected to launch on January 30, 2013. Unfortunately for RIM, the fee change became a focal point for investors, rather than the fact that BlackBerry 10 is just around the corner.
About a third of RIM's total revenue comes from the services segment. By introducing new fees, some analysts feel RIM is putting its business at risk, and with Android and iOS performing so well, now is hardly the time to do so.