With Research In Motion (RIM) set to report its second-quarter earnings later Thursday, investors are feeling a little more optimistic about the struggling BlackBerry maker after being badly burned by owning the company’s stock over the last year.
Analysts had expected the Canadian company to reveal in its earnings report that it has started losing subscribers for the first time in its history.
Instead, RIM announced at a developer event on Tuesday that its subscriber base had grown by 2 million in the quarter that ended Sept. 1. RIM also cheered investors by disclosing that its new devices will go on sale in early 2013.
RIM revolutionized the mobile industry with the once-ubiquitous BlackBerry. Now it's racing against time as it tries to launch a new line of smart phones while struggling to remain afloat.
Shares of RIM have risen 11 percent since Monday as investors bet the company's fortunes are starting to improve. But the company's share price has fallen 90 percent since hitting a recent peak in February 2011.
Will Power, a senior analyst at Robert W. Baird covering wireless communications, said it remains to be seen whether RIM is on the comeback trail.
“I think there are still risks going forward,” he said in an interview on CNBC Thursday. “But there’s always hope.”
Despite news of the subscriber growth, Power said he sees risks ahead for RIM, including a continued “cash burn” -- when a company uses up its cash resources or capital instead of producing positive cash flow.
RIM had $2.2 billion in cash on hand as of June 2. Power expects the company to burn “several million” in 2013 and “a good deal more” in 2014.
However, the consumers' reaction to RIM’s new product is what really counts, he said.
The Canadian company is pinning its recovery hopes on the launch of the Blackberry 10 -- the next-generation mobile platform that will power a suite of new smartphones and is due for release in the first quarter of 2013.
“Will customers care?” he said. “At the end of the day, it’s going to hinge on consumer adoption.”