Why Research In Motion Shares Cratered

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of BlackBerry mobile device maker Research In Motion (NASDAQ: BBRY  ) lost their signal with shareholders, dropping as much as 21% after the company reported third-quarter earnings results.

So what: It wasn't so much RIM's third-quarter report that decimated the stock today – RIM actually beat EPS expectations despite a 47% cliff-dive in revenue – but the company's forecast that sent Wall Street analysts into a tizzy. RIM announced plans to change its fee service structure (without question, the highest-margin area of its business), creating tiered pricing levels which some pundits feel could cripple RIM's margins. In addition, RIM also alluded that heavy investments associated with its long-awaited BlackBerry 10 mobile device will further deteriorate its $2.9 billion in remaining cash on hand, although management doesn't expect this level to dip below $2 billion over the next two quarters.

Now what: Another day, another quarter of shareholders completely getting their behinds handed back to them by a company that couldn't find its way out of a paper bag. The smartphone market is dominated by Samsung and Apple (NASDAQ: AAPL  ) , the latter which sold a combined 52.9 million iPhones in just the previous two quarters. Even Nokia (NYSE: NOK  ) , which struggled to get its Lumia smartphone to market because of its own operating system indecisiveness, has shown signs of life and beat RIM's BlackBerry 10 to market following multiple delays. If RIM can't outduel Nokia, which admittedly moves as slow as molasses in winter when it comes to new devices, then all hope could be lost. Even following today's share price paring, I'm not going anywhere near RIM.

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