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RIM CEO: Service Revenue in Place, Not Going Away

Friday, 21 Dec 2012 | 7:48 AM ET
CEO Heins on What's Next For RIM
CNBC's Jon Fortt talks with Research in Motion CEO,Thorsten Heins, about the company's mixed Q3 earnings and the launch of its new BlackBerry 10.

Research in Motion CEO Thorsten Heins moved to address in a CNBC interview on Friday concerns among investors surrounding the company's revelation last night of a new, tiered plan for fees it charges to use its platform.

"[RIM has] 79 million BlackBerry subscribers on BlackBerry OS devices and that service revenue is not going to go away," Heins told "Squawk Box," after the embattled smartphone maker reported better-than-expected quarterly results Thursday after the closing bell.

But the company said it lost about a million BlackBerry subscribers, recording the first-ever drop in its subscriber base.

"The transition period from BlackBerry 7 to BlackBerry 10 is going to be probably one-and-a-half to two years," he said, adding that the new service menu pertaining to BlackBerry 10 is aimed at the next generation of devices.

Heins did admit that there has been some discounting to stay competitive on current service fees, which account for about a third of RIM's revenue and are considered a stable part of its business.

"They want to lower barriers of entry to get [BB10] adopted," Deutsche Bank Securities technology analyst Brian Modoff told CNBC on Friday. "So they're trying to make it more appealing from that standpoint in front of the launch." (Watch: Modoff's Take on Whether BB10 Will Save RIM?)

Last night, Research in Motion posted a fiscal third-quarter loss excluding one-time items of $114 million, or 22 cents per share. Revenue for dropped 48 percent to $2.7 billion.

On the conference call following the release, Heins said consumers will be able to purchase BlackBerry 10 phones shortly after the device's launch event on Jan. 30.

In Friday's CNBC interview, Heins said: "[RIM] will ship in significant volume of [BB10 devices] in this fiscal quarter into the U.S. and all global markets."

Deutsche Bank's Modoff said RIM doesn't have too much time once the new devices are in the hands of consumers. He added that getting app developers on board is key to the future of the platform.

By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.