TORONTO Shares of Research In Motion rose more than 5 percent on Wednesday after the struggling BlackBerry maker announced better-than-expected subscriber numbers and assured wary investors its new smartphone will go on sale in early 2013.
Waterloo, Ontario-based RIM will announce quarterly results on Thursday and analysts had expected the company, for the first time in its history, to report that it had started to lose subscribers. But at a developer event on Tuesday, RIM said its subscriber base grew by 2 million in the quarter ended Sept 1.
That took analysts by surprise as RIM's aging line-up of BlackBerry devices has been losing ground rapidly to Apple's iPhone and Samsung's line of Galaxy products in the key North American and European markets.
"Overall that is a promising performance given RIM's lackluster portfolio of smartphones," Scotiabank analyst Gus Papageorgiou said in a note to clients. "We believe largely all of these subscribers came from outside North America as the company continues to lose ground in that market."
RIM shares rose 37 cents, or 5.6 percent to $6.97 in midday trading on the Nasdaq on Wednesday. The stock, which had been hovering around nine-year lows, had already risen almost 5 percent on Tuesday.
RIM is trying to reinvent itself through a line of revamped smartphones that will run on its new BlackBerry 10, or BB10 operating system, on which the company has staked its future.
In an attempt to create a buzz around the new devices, Chief Executive Thorsten Heins gave a preview of the smartphone and its features to app developers at an event on Tuesday in San Jose, California.
In a note to clients, Cormark analyst Richard Tse said RIM struck the rights chords at the event, but cautioned that it is hard to evaluate how well the BB10 devices will work in real world conditions until they are on the market.
In a demonstration of the BB10, RIM executives showed off the new smartphone's "flow" and "peek" features, which allow users to access important features without exiting an app that is already running.
"We were intrigued by the ease of navigation and the 'peek' functionality," TD Securities analyst Scott Penner said in a note to clients.
Penner, who was at the event, said attendees in general were positive about the advances RIM has made in the new devices, which are set begin carrier certification process next month.
ON THE RIGHT TRACK
William Stofega, who manages IDC's mobile device technology research program, said RIM is on the right track.
"RIM is doing something different," Stofega said. "They really have to reinvent themselves and they are on the road to doing that."
Stofega, who has played with the new BB10 devices, said he likes the look and feel of the new smartphones.
"I think there is a lot more skepticism among financial analysts, but the developers like what they see and hear thus far," said Stofega, who attended the RIM event on Tuesday.
During the presentation, the company, which is doing all it can to attract app developers to its platform, showed off a variety of apps, from Facebook to FourSquare. RIM said the BB10 will feature all popular social networking apps.
"RIM is definitely doing things right to ensure launch success," said Carl Howe of consumer research firm Yankee Group. "Nothing is being rushed. Patience is being encouraged, but not because things are not being delivered, but because the company is dotting its i's and crossing its t's."
RIM, which has been criticized for its lack of a unified-content and app store, said its new platform will have a single store for music, videos and apps that will rival iTunes and Google Play. RIM said it will offer users the option of carrier billing to pay for the content they download.
"We note neither Android nor iOS have carrier billing capabilities, which we believe are very important, especially in developing markets such as India or Indonesia," Scotia's Papageorgiou said.
RIM's Toronto-listed shares were up 5.4 percent at C$6.85 at midday on Wednesday.
(Reporting by Euan Rocha; Editing by Maureen Bavdek; and Peter Galloway)