BlackBerry 10: More Analysts Cut Expectations - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Mobile // Mobile Devices
News
2/21/2013
11:36 AM
50%
50%

BlackBerry 10: More Analysts Cut Expectations

BlackBerry's Z10 smartphone may not do as well as originally expected, several analysts say after reviewing early sales figures.

BlackBerry 10: Visual Tour Of Smartphones, OS
BlackBerry 10: Visual Tour Of Smartphones, OS
(click image for larger view and for slideshow)
BlackBerry is on pace to sell about 300,000 BlackBerry Z10s during the first quarter of 2013. That number is just a fraction of what analysts first predicted, though they remain bearish on BlackBerry's comeback chances.

Canaccord Genuity analyst T. Michael Walkley slashed his forecasts from 1.75 million unit shipments during the first quarter to just 300,000. Walkley cut his estimates, in part, because the device didn't launch until February 1, reducing the time it is available to consumers during the quarter.

The device first went on sale in the U.K. and Canada at the beginning of the month. Initial sales suggested that demand for the device was high, but subsequent word about the limited stock of the Z10 dampened those reports. The Z10 has since launched in a handful of other countries, including Singapore and South Africa. It won't reach U.S. store shelves until mid-March at the earliest.

Walkley isn't bullish on the Z10's U.S. ability to impact Q1 sales. First, it will reach stores too late in the quarter. Second, and worse, he believes supply will be limited as carriers stock the device cautiously. "We anticipate carriers will not build large inventory levels," Walkley told clients in a report. He's not alone.

[ What's ahead for mobility in the enterprise? See 4 Big BYOD Trends For 2013. ]

Pacific Crest analyst James Faucette released his own research about the Z10 to investors. He believes BlackBerry will sell between 275,000 and 325,000 Z10s during the first quarter, which falls in line with Walkley's estimates. Faucette went so far as to suggest that Wall Street hasn't been hard enough on BlackBerry and its new smartphone.

"We believe the Street has gotten ahead of the potential reality for BB10 shipments," wrote Faucette. "There is no line of sight to profitability; we remain sellers of BBRY." Faucette believes BlackBerry will have to triple or quadruple its device shipments in order to sustain profitability.

"We continue to believe the Z10 launch involves relatively small shipment volumes and only moderate sell-through so far in markets which have historically been some of BlackBerry's strongest," continued Faucette. "As a result, investor optimism that the BB10 could reverse the company's trajectory appears to be well overdone at current levels, in our view."

Last, analyst Brian Bear also offered dampened thoughts on BlackBerry 10. "We are getting indications that U.S. carriers are not optimistic about Z10 sell-through, but are instead more hopeful about the keyboard-based Q10," he wrote." The Z10 will precede the Q10 by at least a month. The Q10 is more like a traditional BlackBerry in that it has a physical QWERTY keyboard in addition to the touchscreen.

Perhaps most damningly, Bear said that Apple and Google smartphones "are simply too entrenched in the U.S. market" for BlackBerry to make a comeback beyond an initial run of BlackBerry enthusiasts.

As noted last week, there's more to the story than this initial launch. BlackBerry's comeback hopes will look much clearer by the end of the second quarter, during which the Z10 and Q10 will enjoy wider availability.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
kanttila750
50%
50%
kanttila750,
User Rank: Apprentice
2/25/2013 | 1:04:52 PM
re: BlackBerry 10: More Analysts Cut Expectations
Dear BB, as a long-time customer of yours, it has come time to replace my trusty Bold and move into the 21st century with both feet in. Judging from what I've heard about your new offerings, they are too little, too late. It would appear you are hopelessly trailing the industry by 3-5 years...unless the local Verizon store gives me a Z10 for free with no contract, I will choose another brand I don't have to justify having acquired. I trust my kids will know which one to get.
gfinale
50%
50%
gfinale,
User Rank: Apprentice
2/22/2013 | 4:16:45 PM
re: BlackBerry 10: More Analysts Cut Expectations
Even if the BB10s weren't available for a part of the quarter, say 1 out of 3 months, if they should have sold 1.75 million in a full quarter then at least 1 million would be expected and yet, only .3 million. Blackberry would seemingly have released BB10 in their most favourable markets in order to have a good result that encouraged the US to embrace it, yet those markets are not showing nearly enough interest. On top of everything, by changing their name, they have inferred a company that is made or destroyed on that single product.
J. Nicholas Hoover
50%
50%
J. Nicholas Hoover,
User Rank: Apprentice
2/22/2013 | 3:54:18 PM
re: BlackBerry 10: More Analysts Cut Expectations
Color me unsurprised. Blackberry may have done too little far too late.
Commentary
2021 Outlook: Tackling Cloud Transformation Choices
Joao-Pierre S. Ruth, Senior Writer,  1/4/2021
News
Enterprise IT Leaders Face Two Paths to AI
Jessica Davis, Senior Editor, Enterprise Apps,  12/23/2020
Slideshows
10 IT Trends to Watch for in 2021
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/22/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Slideshows
Flash Poll