Yesterday, Research In Motion’s chief executive officer said something that scared the living daylights out of investors and analysts.
Thorsten Heins stated that “subscribers that require enhanced services, including advanced security, mobile device management and other services, are expected to continue to generate monthly service revenue. Other subscribers who do not utilize such services are expected to generate less or no service revenue.”
Basically, this translates into the launch of BlackBerry 10 potentially slashing this easy, stable, high-margin service revenue. And the more successful BB10 is, the less of this revenue RIM could generate.
Analysts asked question after question about this during a conference call following the company’s quarterly earnings report yesterday. But the answers were all ducks and dodges, smoke and mirrors—RIM was essentially just telling everyone to wait it out because even they aren’t exactly sure how things will go down in 2013.
This poorly timed uncertainty has caused RIM’s stock to crash. It’s plummeted more than 17% in trading today, erasing several weeks of solid, consistent gains.
Now analysts like National Bank Financial’s Kris Thompson—who was bullish on RIM just last month—have downgraded the stock to “underperform.” Kris slashed the stock’s price target to $10 from $15. It’s currently trading at just under $12.