RIM shares dive as fee changes catch market off guard

(Reuters) – Shares of BlackBerry maker Research In Motion Ltd dropped 20 percent on Friday on fears that a new fee structure for its high-margin services segment could put pressure on the business that has set the company apart from its competitors.

The shares were still more than 80 percent above the year’s low, which was hit in September. They started to rally in November as investors began to bet that RIM’s long-awaited new BlackBerry 10 phones, to be launched in January, would turn the company around.

The services segment has long been RIM’s most profitable and accounts for about a third of total revenue. Some analysts said there was a risk that the fee changes could endanger its service ecosystem and leave the Canadian company as just another handset maker.

The fee changes, which RIM announced on Thursday after the close, overshadowed stronger-than-expected quarterly results. The company said the new pricing structure would be introduced with the BlackBerry 10 launch, expected on January 30.

RIM said some subscribers would continue to pay for enhanced services such as advanced security. But under the new structure, some other services would account for less revenue, or even none at all.

Chief Executive Thorsten Heins tried to reassure investors in a television interview with CNBC on Friday, saying RIM’s “service revenue isn’t going away”.

He added: “We’re not stopping. We’re not halting. We’re transitioning.”

Since taking over at RIM in January, Heins has focused on shrinking the company and getting it ready to introduce its new BB10 devices, which RIM says will help it claw back ground it has lost to competitors such as Apple Inc and Samsung Electronics.

But the news of the new services pricing strategy came as a shock to markets, and some analysts cut their price targets on RIM stock.

RIM will not be able to sustain profitability by relying on its hardware business alone, said National Bank Financial analyst Kris Thompson, whom Thomson Reuters StarMine has rated the top RIM analyst based on the accuracy of his estimates of the company’s earnings.

Thompson downgraded RIM’s stock to “underperform” from “sector perform” and cut his price target to $ 10 from $ 15.

Forrester Research analyst Charles Golvin said the move was likely about stabilizing market share: “At the moment, they need to stem the bleeding.”

He said the tiered pricing might line up better with RIM’s subscriber base as it expands in emerging economies.

RIM’s Nasdaq-listed shares were down 19.8 percent at $ 11.32 on Friday afternoon. The stock was down 19.6 percent to C$ 11.21 on the Toronto Stock Exchange.

COUNTDOWN TO LAUNCH

The success of the BB10 will be crucial to the future of RIM, which on Thursday posted its first-ever decline in total subscribers. Heins said on CNBC that the company expected to ship millions of the new devices.

He cautioned that this will require heavy investment, which will reduce RIM’s cash position in its fourth and first quarters from $ 2.9 billion in its fiscal third quarter. He said, however, it would not go below $ 2 billion.

Still, doubts remain about whether RIM can pull off the transformation. Needham analyst Charlie Wolf said the BB10 would have to look meaningfully superior to its competitors for RIM to stage a comeback.

Canaccord Genuity analyst Michael Walkley said it was highly unlikely that the market would support RIM’s new mobile computing ecosystem, and he remained skeptical about the company’s ability to survive on its own.

“We believe RIM will eventually need to sell the company,” said Walkley, who cut his price target on RIM shares to $ 9 from $ 10.

Baird Equity Research analysts said BB10 faced a daunting uphill battle against products from Apple, as well as those using Google Inc’s Android operating system, and, increasingly, phones with Microsoft Corp’s Windows 8 operating system.

Baird maintained its “underperform” rating on the stock, while Paradigm Capital downgraded the shares to “hold” from “buy” on uncertainty around the services revenue model.

“RIM has gone from having one major aspect of uncertainty – BlackBerry 10 adoption – to two, given an uncertain floor on services revenue,” William Blair analyst Anil Doradla said.

RIM will have to discount BB10 devices significantly to maintain demand, Bernstein analyst Pierre Ferragu said.

The BlackBerry, however, still offers the security features that helped it build its reputation with big business and government, a selling point with some key customers.

Credit Suisse maintained its “neutral” rating on the stock, but not because it expected BB10 to be a big success.

“Only the potential for an outright sale of the company or a breakup keeps us at a neutral,” Credit Suisse analysts said.

Separately on Friday, ailing Finnish mobile phone maker Nokia said it had settled its patent dispute with RIM in return for payments. Nokia did not disclose detailed terms, but said the deal included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM. [ID:nL5E8NL22K]

($ 1=$ 0.98 Canadian)

(Reporting by Chandni Doulatramani in Bangalore and Allison Martell in Toronto. Additional reporting by Sinead Carew in New York; Editing by Ted Kerr, Dale Hudson, Janet Guttsman,; Lisa Von Ahn and Peter Galloway)

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Singer Odell first male to win Brit newcomer award

LONDON (Reuters) – Singer-songwriter Tom Odell was named the Brit Awards’ tip for the top in 2013, the first male artist to receive the honor previously won by chart queens including Adele and Jessie J.

The 22-year-old, whose musical style and voice has drawn comparisons to Coldplay lead singer Chris Martin, beat London electronic duo AlunaGeorge and classically trained soul singer Laura Mvula to the Critics’ Choice Award.

Selected by a panel of music industry experts, the annual prize goes to a British artist tipped for mainstream success, and previous winners have gone on to top charts in Britain and beyond.

“Looking at the list of amazing female artists who have won the Award already, I just hope I don’t let the boys down!” Odell said in a statement.

He released his debut E.P. “Songs From Another Love” in late 2012 and followed up with a performance on the popular live music show “Later…with Jools Holland“.

Odell also appears on the BBC’s Sound of 2013 longlist and MTV’s Brand New For 2013 selection of 10 up-and-coming artists, as the music business seeks to identify the chart-toppers of tomorrow.

Many acts, including Odell, already have record deals with major labels.

(Reporting by Mike Collett-White, editing by Paul Casciato)

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About New York: One Boy’s Death Moves State to Action to Prevent Others

Prompted by the death of a 12-year-old Queens boy in April, New York health officials are poised to make their state the first in the nation to require that hospitals aggressively look for sepsis in patients so treatment can begin sooner. Under the regulations, which are now being drafted, the hospitals will also have to publicly report the results of their efforts.

The action by New York has elated sepsis researchers and experts, including members of a national panel who this month formally recommended that the federal government adopt standards similar to what the state is planning.

Though little known, sepsis, an abnormal and self-destructive immune response to infection or illness, is a leading cause of death in hospitals. It often progresses to severely low blood pressure, shock and organ failure.

Over the last decade, a global consortium of doctors, researchers, hospitals and advocates has developed guidelines on early identification and treatment of sepsis that it says have led to significant drops in mortality rates. But first hints of the problem, like a high pulse rate and fever, often are hard for clinicians to tell apart from routine miseries that go along with the flu or cold.

“First and foremost, they need to suspect sepsis,” Dr. Mitchell M. Levy, a professor at Brown University School of Medicine and a lead author of a paper on the latest sepsis treatment guidelines to be published simultaneously next month in the United States in a journal, Critical Care Medicine, and in Europe in Intensive Care Medicine.

“It’s the most common killer in intensive care units,” Dr. Levy said. “It kills more people than breast cancer, lung cancer and stroke combined.”

If started early enough, the treatment, which includes antibiotics and fluids, can help people escape from the drastic vortex of sepsis, according to findings by researchers working with the Surviving Sepsis Campaign, the global consortium. The tactics led to a reduction of “relative risk mortality by 40 percent,” Dr. Levy said.

Although studies of 30,000 patients show that the guidelines save lives, “the problem is that many hospitals are not adhering to them,” said Dr. Clifford S. Deutschman, director of the sepsis research program at the Perelman School of Medicine at the University of Pennsylvania and the president of the Society of Critical Care Medicine.

About 300 hospitals participate in the study, and the consortium has a goal of having 10,000. “The case is irrefutable: if you take these sepsis measures, and you build a program to help clinicians and hospitals suspect sepsis and identify it early, that will mean more people will survive,” Dr. Levy said.

At a symposium in October, the New York health commissioner, Dr. Nirav R. Shah, said that he would require state hospitals to adopt best practices for early identification and treatment of sepsis. Gov. Andrew M. Cuomo intends to make it a major initiative in 2013, said Josh Vlasto, a spokesman for the governor. “The state is taking unprecedented measures to prevent and effectively treat sepsis in health care facilities across the state and is looking at a wide range of additional measures to better protect patients,” Mr. Vlasto said.

In April, Rory Staunton, a sixth grader from Queens, died of severe septic shock after he became infected, apparently through a cut he suffered while playing basketball. The severity of his illness was not recognized when he was treated in the emergency room at NYU Langone Medical Center. He was sent home with a diagnosis of an ordinary bellyache. Hours later, alarming laboratory results became available that suggested he was critically ill, but neither he nor his family was contacted. For an About New York column in The New York Times, Rory’s parents, Ciaran and Orlaith Staunton, publicly discussed their son’s final days. Their revelations prompted doctors and hospitals across the country to seek new approaches to heading off medical errors.

In addition, Commissioner Shah in New York convened a symposium on sepsis, which included presentations from medical experts and Rory’s parents.

At the end of the meeting, Dr. Shah said that he had listened to all the statistics on the prevalence of the illness, and that one had stuck in his memory: “Twenty-five percent,” he said — the portion of the Staunton family lost to sepsis.

He said he would issue new regulations requiring hospitals to use best practices in identifying and treating sepsis, actions that, he said, he was taking “in honor of Rory Staunton.”

The governor’s spokesman, Mr. Vlasto, said that “the Staunton family’s advocacy has been essential to creating a strong public will for action.”

Dr. Levy said New York’s actions were “bold, pioneering and grounded in good scientific evidence,” adding, “The commissioner has taken the first step even before the federal government.”

Dr. Deutschman said that initiatives like those in New York were needed to overcome resistance among doctors. “You’re talking about a profession that has always prided itself on its autonomy,” he said. “They don’t like to be told that they’re wrong about something.”

The availability of proven therapies should move treatment of sepsis into a new era, experts say, comparing it to how heart attacks were handled not long ago. People arriving in emergency rooms with chest pains were basically put to bed because not much could be done for them, said Dr. Kevin J. Tracey, the president of the Feinstein Institute for Medical Research at North Shore-Long Island Jewish Health System. Dr. Tracey, a neurosurgeon, has made major discoveries about the relationship between the nervous system and the runaway immune responses of sepsis.

If physicians and nurses were trained to watch for sepsis, as they now routinely do for heart attacks, many of its most dire problems could be headed off before they got out of control, he said. The Stauntons have awakened doctors and nurses to the possibility of danger camouflaged as a stomach bug.

“We are with sepsis where we were with heart attack in the early 1980s,” Dr. Tracey said.

“If you don’t think of it as a possibility, this story can happen again and again. This case could change the world.”

E-mail: dwyer@nytimes.com

Twitter: @jimdwyernyt

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Emanuel explores Midway privatization

Mayor Rahm Emanuel's administration will explore the possibility of privatizing Midway Airport but will take a shorter-term, more tightly controlled approach than was employed by former Mayor Richard Daley's team on the city's first go-round.

Chicago's last try, a 99-year lease that would have brought in $2.5 billion, died in 2009 when the financial markets froze up.

The city's latest intentions are expected to be formally announced Friday, ahead of a Dec. 31 deadline for deciding whether to retain a slot for Midway in the Federal Aviation Administration's airport privatization pilot program. The city put off this decision several times previously.

The move, preliminary as it is, is sure to be politically charged, given the anger over the way Daley's 75-year parking meter privatization deal has played out, with proceeds used to plug operating deficits and meter rates rising sharply.

With that historical backdrop, Emanuel is suggesting a more conservative approach. It includes a shorter-term lease of less than 40 years; a "travelers' bill of rights" aimed at ensuring any changes will benefit passengers; and a continuing stream of revenue for the city, giving it a shot to capture some growth.

And unlike the parking meter and Chicago Skyway lease deals, a new Midway transaction would not allow proceeds to be used to plug operating deficits or to pay for operations in any way, Emanuel said in an interview Thursday.

"I will not let the city use it as a crutch to not make the tough decisions on the budget," he said.

But while a shorter lease and greater city control may play well locally, those sorts of terms may not appeal to investors, experts said in interviews this month.

"The shorter the lease term, the lower the bid prices are going to be — that's just the math," said Steve Steckler, chairman of the Infrastructure Management Group, a Bethesda, Md.-based company that advises infrastructure owners and operators. "I'd be shocked if investors offered more than $2 billion for a 40-year lease," Steckler said.

Emanuel said: "Nobody knows until you talk to people. … I'm the mayor and I'm not agreeing to … 99 years. I'm saying it's either 40 years or less." His office has not offered an estimate of what such a deal could bring in, saying it would be premature.

"No final decisions have been made, but we can't make a decision until we evaluate fully if this could be a win for Chicagoans," Emanuel said.

A private operator would take over management of such revenue-producing activities as food, beverage and car rental concessions and parking lots. The FAA would continue to provide air traffic control, while the Transportation Security Administration would continue to provide security operations. The city would retain ownership.

Few details were provided about how privatization would affect travelers and Midway employees. Emanuel said specifics will emerge over time.

By year's end, the city will send the FAA a preliminary application, a timetable and a draft "request for qualification," a document the city will put out early next year to identify qualified bidders for the project. A review of the potential bidders will be conducted in the spring.

Last year, Emanuel expressed hesitation in pursuing a private lease for Midway unless a careful vetting process was in place, saying taxpayers were correct to be wary, given the city's history.

The evaluation process will be deliberate and open to public view, he said Thursday.

He pledged to create a committee of business, labor and civic leaders that will provide updates to the public on a regular basis and that will select an independent adviser to vet the transaction. The committee will deliver a report to the City Council, and there will be a 30-day review period before any vote.

"I set up a different process and a different set of principles that stand in stark contrast to what was discussed or done in the past," Emanuel said.

The FAA pilot program frees cities from regulations that require airport revenue to be used for airport purposes. It allows money to be withdrawn for other uses.

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Judge refuses to erase 'code of silence' verdict

Security tape captures former Chicago police Officer Anthony Abbate beating up bartender Karolina Obrycka at Jesse's Shortstop Inn in Chicago in February 2007.

By David Heinzmann




Tribune reporter

1:42 p.m. CST, December 20, 2012

A federal judge Thursday turned down the request by Mayor Rahm Emanuel’s administration to erase a jury’s finding that the Chicago Police Department has a “code of silence” to protect rogue officers.

The ruling came in the case of the notorious videotaped barroom beating of a female bartender by an off-duty police officer. The ruling means the bartender will still get an $850,000 jury award from the November verdict in her lawsuit against the police department.

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Acer will beat Google to market with its own $99 tablet

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Taylor Swift keeps Bruno Mars out of Billboard 200 top spot

LOS ANGELES (Reuters) – Country pop star Taylor Swift held her reign at the top of the Billboard 200 album chart on Wednesday, keeping retro-inspired R&B singer Bruno Mars‘ new album at bay.

Swift’s latest album, “Red,” released in October, held the No. 1 slot for a fifth non-consecutive week with sales of 208,000, according to figures from Nielsen SoundScan.

Mars’ second album, “Unorthodox Jukebox,” sold 192,000 copies in its opening week to take the No. 2 slot.

The album’s lead single, “Locked Out of Heaven,” stayed at the top spot on the Billboard Hot 100 chart for a second week, and is the singer’s fourth chart-topping single. It also tops the Digital Songs chart this week.

Hip hop artist The Game entered the chart at No. 6 with his fifth studio album, “Jesus Piece,” selling 86,000 copies.

Four festive albums sat in the top ten this week, with Michael Buble‘s “Christmas” at No. 3, Rod Stewart‘s “Merry Christmas Baby” at No. 5, Blake Shelton‘s “Cheers, It’s Christmas” at No. 8, and Lady Antebellum‘s “On This Winter’s Night” at No. 10.

(Reporting by Piya Sinha-Roy Editing by Jill Serjeant, Gary Hill)

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U.N. Suspends Polio Campaign in Pakistan After Killings of Workers

B.K. Bangash/Associated Press

A Pakistani woman administered polio vaccine to an infant on Wednesday in the slums of Islamabad. Militants have killed nine polio workers this week.

LAHORE, Pakistan — The front-line heroes of Pakistan’s war on polio are its volunteers: young women who tread fearlessly from door to door, in slums and highland villages, administering precious drops of vaccine to children in places where their immunization campaign is often viewed with suspicion.

Now, those workers have become quarry. After militants stalked and killed eight of them over the course of a three-day, nationwide vaccination drive, the United Nations suspended its anti-polio work in Pakistan on Wednesday, and one of Pakistan’s most crucial public health campaigns has been plunged into crisis.

The World Health Organization and Unicef ordered their staff members off the streets, while government officials reported that some polio volunteers — especially women — were afraid to show up for work.

At the ground level, it is those female health workers who are essential, allowed privileged entrance into private homes to meet and help children in situations denied to men because of conservative rural culture. “They are on the front line; they are the backbone,” said Imtiaz Ali Shah, a polio coordinator in Peshawar.

The killings started in the port city of Karachi on Monday, the first day of a vaccination drive aimed at the worst affected areas, with the shooting of a male health worker. On Tuesday four female polio workers were killed, all gunned down by men on motorcycles in what appeared to be closely coordinated attacks.

The hit jobs then moved to Peshawar, the capital of Khyber-Pakhtunkhwa Province, which, along with the adjoining tribal belt, constitutes Pakistan’s main reservoir of new polio infections. The first victim there was one of two sisters who had volunteered as polio vaccinators. Men on motorcycles shadowed them as they walked from house to house. Once the sisters entered a quiet street, the gunmen opened fire. One of the sisters, Farzana, died instantly; the other was uninjured.

On Wednesday, a man working on the polio campaign was shot dead as he made a chalk mark on the door of a house in a suburb of Peshawar. Later, a female health supervisor in Charsadda, 15 miles to the north, was shot dead in a car she shared with her cousin.

Yet again, Pakistani militants are making a point of attacking women who stand for something larger. In October, it was Malala Yousafzai, a schoolgirl advocate for education who was gunned down by a Pakistani Taliban attacker in the Swat Valley. She was grievously wounded, and the militants vowed they would try again until they had killed her. The result was a tidal wave of public anger that clearly unsettled the Pakistani Taliban.

In singling out the core workers in one of Pakistan’s most crucial public health initiatives, militants seem to have resolved to harden their stance against immunization drives, and declared anew that they consider women to be legitimate targets. Until this week, vaccinators had never been targeted with such violence in such numbers.

Government officials in Peshawar said that they believe a Taliban faction in Mohmand, a tribal area near Peshawar, was behind at least some of the shootings. Still, the Pakistani Taliban have been uncharacteristically silent about the attacks, with no official claims of responsibility. In staying quiet, the militants may be trying to blunt any public backlash like the huge demonstrations over the attack on Ms. Yousafzai.

Female polio workers here make for easy targets. They wear no uniform but are readily recognizable, with clipboards and refrigerated vaccine boxes, walking door to door. They work in pairs — including at least one woman — and are paid just over $2.50 a day. Most days one team can vaccinate 150 to 200 children.

Faced with suspicious or recalcitrant parents, their only weapon is reassurance: a gentle pat on the hand, a shared cup of tea, an offer to seek religious assurances from a pro-vaccine cleric. “The whole program is dependent on them,” said Mr. Shah, in Peshawar. “If they do good work, and talk well to the parents, then they will vaccinate the children.”

That has happened with increasing frequency in Pakistan over the past year. A concerted immunization drive, involving up to 225,000 vaccination workers, drove the number of newly infected polio victims down to 52. Several high-profile groups shouldered the program forward — at the global level, donors like the Bill and Melinda Gates Foundation, the United Nations and Rotary International; and at the national level, President Asif Ali Zardari and his daughter Aseefa, who have made polio eradication a “personal mission.”

On a global scale, setbacks are not unusual in polio vaccination campaigns, which, by dint of their massive scale and need to reach deep inside conservative societies, end up grappling with more than just medical challenges. In other campaigns in Africa and South Asia, vaccinators have grappled with natural disaster, virulent opposition from conservative clerics and sudden outbreaks of mysterious strains of the disease.

Declan Walsh reported from Lahore, and Donald G. McNeil Jr. from New York. Ismail Khan contributed reporting from Peshawar, Pakistan.

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Illinois jobless rate falls to 8.7%

Illinois' unemployment rate dipped to 8.7 percent in November. (Bloomberg file photo / December 20, 2012)

Associated Press

12:30 p.m. CST, December 20, 2012

Illinois' unemployment rate dipped to 8.7 percent in November as the economy added 16,400 jobs.

Preliminary data released Thursday by the Illinois Department of Employment Security indicate the largest monthly job gain of the year. There still are 574,600 Illinoisans out of work. The rate does not reflect unemployed people who've quit looking for work.

IDES Director Jay Rowell says November's job growth is encouraging and "reinforces the trend of positive economic momentum."

But he says progress will slow if Congress and the president fail to come to a resolution on the so-called fiscal cliff.

November's seasonally adjusted rate is one-tenth of a percentage point lower than in October and 1.1 percentage points lower than November 2011.

Most job gains last month were in professional and business services and manufacturing.

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White House pushes gun policy effort after Newtown shooting

WASHINGTON (Reuters) - President Barack Obama directed a Cabinet group on Wednesday to give him recommendations by next month on ways to tighten the regulation of guns in the wake of the Connecticut massacre of schoolchildren.

Responding to national outrage over Friday's killing of 20 children, aged 6 and 7, Obama held a White House news conference to announce that Vice President Joe Biden will lead an effort to craft policies to crack down on gun violence.

Obama said he believed Americans would support the reinstatement of a ban on the sale of military-style assault weapons, a ban on the sale of high-capacity ammunition clips, and a law requiring background checks on buyers before all gun purchases, which would close a loophole that allows sales at open-air gun shows without such background checks.

Saying gun control cannot be the only solution to the problem, Obama expressed support for making it easier for Americans to get access to mental health care - "at least as easy as access to a gun."

Under pressure from fellow Democrats to act, Obama insisted the guns issue would not be ignored this time. Previous appeals for more gun regulation have died even as mass shootings have continued.

With Biden at his side, Obama said the group would give him proposals that he could outline in his State of the Union speech in late January. Cabinet members involved include Attorney General Eric Holder, Homeland Security Secretary Janet Napolitano, Health and Human Services Secretary Kathleen Sebelius and Education Secretary Arne Duncan.

"This is not some Washington commission. This is not something where folks are going to be studying the issue for six months and publishing a report that gets read and then pushed aside. This is a team that has a very specific task to pull together real reforms right now," Obama said.

The Newtown, Connecticut, shootings of so many schoolchildren by a 20-year-old man have shocked Americans in ways that previous mass shootings have not. The gunman's mother and six adults at the school were also killed before the gunman shot himself.

Some previously adamant opponents of increased gun control have expressed a willingness to consider more regulation. Even the powerful National Rifle Association, the lobby group that has sought time and again to stymie gun legislation, said this week that it would be prepared to offer meaningful contributions to ensure there is no repeat of Newtown.

WAKE-UP CALL

Obama himself has done little to rein in America's gun culture in his four years in office. His administration has to a certain extent expanded gun rights by permitting the carrying of firearms in national parks.

Asked why he has been a no-show on the subject until now, Obama defended himself, saying he has been dealing with the worst economic crisis since the Great Depression and wars in Iraq and Afghanistan.

"I don't think I've been on vacation," he said. The Newtown massacre, he said, "should be a wake-up call for all of us."

Whatever steps Obama's task force comes up with are likely to face some criticism because many Republicans see the U.S. Constitution's Second Amendment right to bear arms as sacrosanct.

"What we're looking for here is a thoughtful approach that says we can preserve our Second Amendment, we can make sure that responsible gun owners are able to carry out their activities, but that we're gonna actually be serious about the safety side of this," Obama said.

Obama has tapped Biden to lead other high-profile initiatives, including efforts on a deficit-reduction compromise with congressional Republicans in 2011.

U.S. Representative Ron Barber, who was wounded in a 2011 Arizona shooting that targeted his predecessor, Gabrielle Giffords, welcomed the effort and echoed other Democratic lawmakers' calls to ban military-grade guns.

"We cannot go on blithely believing that we can solve this problem in other ways. We have to look at the weaponry used and we have to look at the people who use it and we have to do something about both," Barber said at a news conference earlier at the Capitol.

Friday's massacre was the fourth shooting rampage to claim multiple lives in the United States this year.

(Additional reporting by Roberta Rampton and Patricia Zengerle; Writing by Steve Holland; editing by Doina Chiacu)

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