BlackBerry Insists On ‘Solid’ Z10 Sales

The market reaction to BlackBerry 10 and its new handsets is seen as vital for the Canadian smartphone maker, with continued speculation as to how it is faring so far.

BlackBerry hasn’t offered specifics, but after analyst reports of modest sales in some regions, it released a statement 6 February to highlight the positives.

Big Seller?

The BlackBerry statement included the following from CEO Thorsten Heins:

In Canada, yesterday was the best day ever for the first day of a launch of a new BlackBerry smartphone. In fact, it was more than 50 percent better than any other launch day in our history in Canada. In the UK, we have seen close to three times our best performance ever for the first week of sales for a BlackBerry smartphone.

Jefferies analyst Peter Misek wrote in a 5 February research note that in Canada and the United Arab Emirates, pre-orders have been “solid,” and in the United Kingdom, where the BlackBerry Z10 went on sale a day after its 30 January introduction in New York City, initial sales are going well.

“We believe Carphone Warehouse is seeing widespread sellouts, while O2, Vodafone, Orange and EE are seeing robust demand. We estimate sell-in to be at least several hundred thousand units,” wrote Misek.

He added that sellouts of the white version of the Z10 – which in the United States will be exclusive to Verizon Wireless – have been “widespread.”

Canaccord Genuity analyst T. Michael Walkley, in a note the same day, described early sales in the UK as “solid,” though tempered talk of stores quickly selling out of the first smartphone to run the BlackBerry 10 operating system.

“Our surveys indicated most stores received less than 15 units and sold a majority of these units over a two- to three-day period, leading to initial stock-outs at a few stores and low inventory levels at others,” wrote Walkley.

In Canada, where the smartphone went on sale 5 February, sales were likely modest, The New York Times suggested, reporting that when the Bell Canada store in a tiny Ottawa shopping mall opened its doors there were seven people waiting, and only five of them bought the Z10.

“The underwhelming sales reception at the Rideau Centre’s Bell store was repeated not just later at competing outlets in the mall but throughout BlackBerry’s homeland,” The Times reported, adding that other news outlets reported a similar absence of lines “or in some case even customers” at carriers and retail stores across Canada.

Impressed Operators

BlackBerry 10 is the platform the company has been banking on to reverse its fortunes, which have been crushed over the years by the consumer appeal of the Apple iPhone and Android-running smartphones.

Canaccord’s Walkley believes that with BlackBerry 10 and the Z10, the company has only “closed the gap” between itself and its rivals. While he said the firm is “impressed” by the features of the new smartphone and OS, it believes BlackBerry offers “limited differentiating services or features to win back customers from more mature ecosystems.”

Walkley further added that surveys found that most carrier sales representatives also believe that the Z10 is a marked improvement over earlier BlackBerry handsets, but that the changes in the operating system mean a small amount of training is necessary, which has likely “contributed to some store managers’ lack of enthusiasm for the new device.”

Walkley recommended that investors sell their stock, saying that BlackBerry isn’t being helped by the fact that the Z10 won’t arrive in the United States until mid-March and the QWERTY-equipped BlackBerry Q12, which is what many longtime BlackBerry users really want, won’t show up until mid April – or possibly even later.

BlackBerry CEO Thorsten Heins explained 30 January that the delay in the United States is related to the carrier’s testing processes. “Testing in the US is a rather lengthy process, but we want to respect that process,” he said.

He then broke the news about the Q10 not arriving until around “mid-April,” but in a 5 February report he told the Associated Press that it’s now likely to follow “8 to 10 weeks behind the Z10,” which would put it into mid-May or early June.

The added delay is bad news for a company that has stoically watched US sales nearly disappear, even as older handsets continued to sell well abroad, insisting that BlackBerry 10 would bring US consumers back.

“We believe BlackBerry may eventually sell assets, sell the entire company, or materially change its business model to a smaller niche supplier,” wrote Walkley.

He added that Canaccord Genuity believes BlackBerry will continue to struggle to generate positive earnings, and that investors will mainly focus on the worth of BlackBerry’s various assets – from its software to its patents – rather than the company as a whole.

How much do you know about BlackBerry smartphones? Find out with our quiz!

Originally published on eWeek.