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Matthew Smith has been a business and financial journalist for more than a decade. He previously worked with the Financial Times Group, reporting from New York on company buyouts and refinancing in the wake of the Global Financial Crisis. He started his career reporting on the funds management industry in Sydney.

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A million BlackBerry users jump ship

Published 21 December 2012 14:22, Updated 04 January 2013 14:14

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A million BlackBerry users jump ship

Research in Motion chief executive Thorsten Heins holds up a prototype of the BlackBerry 10 smartphone which the company hopes will help revive its fortunes in its battles with Apple’s iPhone and Google’s Android platform. Photo: Reuters

A million users worldwide stopped using BlackBerry smartphones during the three months to December, maker Research in Motion revealed during its third quarter results.

BlackBerry user numbers fell from 80 million in the September quarter to 79 million in the December quarter, the company announced, marking the first time it had announced a contraction in its user base. RIM shipped 6.9 million devices during the December quarter.

Earlier in the day NASDAQ-listed RIM stock had rallied 8 per cent after the smartphone maker reported a narrower than expected quarterly loss of $US114 million or US22¢ a share, excluding one-off items. A Reuters poll of analysts had predicted a loss of 35¢ per share.

But in after hours trading RIM shares fell around 10 per cent after analysts on the call expressed concerns about the shrinking subscriber base.

Once synonymous with smartphones, particularly among business users, RIM has struggled in recent times to bring new users to its BlackBerry range in the face of fierce competition from Apple’s iPhone and a range of smartphones running Google’s Android operating system.

Next month RIM will launch BlackBerry 10 in an attempt to win customers back to its brand.

Chief executive Thorsten told analysts during the conference call the company believes it has stabilised and will turn the corner in the next year.

“We are realistic about our competitors, but we know that customers in this industry demand and respond to innovation,” he said.

Until now, RIM had been able to offset the sharp drop in the BlackBerrys popularity in its traditional markets, particularly the US, through increased sales to users in developing countries, the New York Times reported. BlackBerry users generate high-margin monthly fees from carriers for RIM, but the last quarters loss of subscribers is more than just a symbolic setback, the paper says.

Heins indicated to analysts on the conference call that RIM had been reducing those fees, which account for 36 per cent of RIM’s revenue, in a bid to keep BlackBerrys current product offerings alive.

Media reports following the conference call suggest analysts expressed concern that the new BlackBerry 10 phones would substantially revamp how RIM sets service fees.

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