RIM Fee Change Makes BlackBerry 10 Do or Die

NEW YORK (TheStreet) - Research In Motion's(RIMM) third quarter earnings were expected to be of secondary importance to management commentary and the company's forecasts headed into a pivotal quarter that will see the launch of the much-anticipated BlackBerry 10.

Still, Research In Motion was able to throw a big curveball to investors and analysts on Thursday after beating third quarter earnings forecasts.

The Waterloo, Ontario-based BlackBerry maker announced a change in the way it will charge users service fees, putting a putting a key source of revenue - that drove over 36% of the company's $2.7 billion in sales -- at risk. The announcement and a lack of specifics on how the change will impact earnings precipitated a 20% reversal in RIM's shares in after-hours trading.

Initial aftermarket share gains in excess of 10% now stand as 12%-plus losses in pre-market Friday trading.

Analysts reacted negatively to the policy change and raised new risks for the struggling mobile handset maker, as it tries to compete against Apple(AAPL) , GOOG(GOOG) and Microsoft(MSFT) -powered smartphone and tablet devices.

"RIMM reported better revenue and a smaller than expected operating loss amid low expectations. Its cash balance again grew through smart working capital management," wrote Sterne Agee analyst Shaw Wu, in reaction to RIM's earnings figures. Still, the numbers were overshadowed by the pricing strategy shift, which CEO Thorstein Heins unveiled on the company's earnings call.

"There were two negative surprises related to the pending launch of BB10 in late-January: (1) its favorable working capital trends will likely reverse due to higher expenses meaning cash usage and (2) its high-margin services business will likely see pressure as it transitions to new terms and pricing," wrote Wu, in a note to clients released on Friday.