BMO Capital Markets analyst Tim Long said changes to the company's service revenue model - outlined Thursday - add more risk for RIM, which is preparing for the launch of its next generation of smartphones and operating system next month.
"We have long viewed the recurring service revenues as the key value driver for the stock," Long wrote in a note to clients.
"With subscribers declining, and the potential for a faster drop in average revenue per user, service revenues could fall even faster. That said, the stock will be most dependent on the launch on new BB10 devices, and we believe it is too early to make a call on - success or failure."
The stock closed down $3.09 or 22 per cent at $10.86 Friday on the Toronto Stock Exchange on very heavy volume of more than 15.5 million shares, making it easily the most active issue on the TSX.
The drop in the stock came despite better than expected financial results by the company in its report after the close of markets on Thursday.
However, it was the plan for the service fees that attracted the most attention.
RIM (TSX:RIM) wants to launch an a la carte menu of services under which both enterprise customers and casual smartphone users can pick their packages.
"The company had previously alluded to potential changes, but the issue is moving more to the forefront now," Long wrote in his report.
"We found the details lacking for such a significant announcement. We believe the service model for the consumer segment is more at risk than for enterprise."
RIM reported Thursday a third-quarter profit of $9 million, or two cents per share on $2.73 billion in revenue, compared with a profit of $265 million or 51 cents per share on $5.17 billion in revenue a year ago.
On an adjusted basis for the quarter, RIM said it lost $114 million or 22 cents per diluted share, coming in notably better than analyst expectations of a quarterly loss of 32 cents per adjusted share on revenue of $2.6 billion.
However, despite the concerns about the service revenue, CIBC analyst Todd Coupland recommended investors continue to buy RIM shares ahead of the launch of BlackBerry 10 on Jan. 30.
"RIM is prepped, cashed up and ready for its Jan. 30 launch with over 150 carriers testing BB10 for final certification," he said.
"We restate our thesis that it remains unclear whether BB10 will help RIM win back material share from Android and iOS. Regardless of market share upside, it is our view RIM is now in a good position to successfully stabilize its base."
During the quarter, the company shipped 6.9 million BlackBerry smartphones and 255,000 BlackBerry PlayBook tablets, however the company's subscriber base slipped by 1 million to 79 million from the previous quarter.
In its outlook, RIM said it expected continued pressure on operating results in its fourth quarter and warned the timing of the BlackBerry 10 release could hurt sales of its current models as customers wait for the new devices.
RIM also said it expected to significantly increase its marketing spending in the fourth quarter and report an operating loss.
The results came as Nokia Corp. said Friday that it has signed a new license agreement with RIM that will end all existing patent litigation between the two struggling companies.
Terms of the deal were confidential, but Nokia said the agreement includes a "one-time payment and on-going payments, all from RIM to Nokia."
The Finnish company sued the Blackberry maker last month for breach of contract in Britain, the United States and Canada over cellular patents they agreed on in 2003.
In recent weeks, RIM shares have traded higher since hitting their lowest level in about a decade in September.
The launch of BlackBerry 10 is widely seen as RIM's chance to regain at least some of its mojo in a sector that it pioneered and once dominated.
However, the company has an uphill battle as it has already seen its market share in North America get gobbled up by alternatives including the latest version of the iPhone and the Samsung Galaxy S3.