The BlackBerry Z10 has not yet been out for a month, but Canaccord Genuity analyst Mike Walkley has already slashed his sales estimates for Research In Motion Ltd.’s make-or-break smartphone from nearly two million devices down to just 300,000.
RIM is relying on new phones running brand new software called BlackBerry 10 to power a comeback after the company’s market share crumbled to Apple Inc.’s iPhone and phones running Google Inc.’s Android software.
A splashy launch event in New York was followed by a gradual, global rollout of the first BlackBerry 10 phone – the full touchscreen Z10 device– in the U.K., Canada and in the Middle East. But an unexpected delay to the device’s availability in the crucial U.S. market led some analysts to cut their sales estimates right out of the gate – and given the size and importance of the U.S. smartphone market, some of these cuts were deep.
Mr. Walkley, who specified in an e-mail that this was his first sales estimate cut since the U.S. delay was revealed, says his checks with retail stores indicate steady, but modest demand, and that wireless carriers – after initial reports of strong interest – are being cautious with how many devices to order from RIM. Generally, RIM sells phones to carriers, who then sell the devices through their own retail chains. Mr. Walkley also cautioned that Samsung and others are likely to have sleek, new devices ready to launch in the U.S. when RIM’s devices finally make it to that market.
“With new BB10 smartphones launching in the U.S. only in mid-March or later at subsidized prices no better than competing high-end Apple/Samsung smartphones… we are lowering our BB10 sales estimates for the February quarter and all of [fiscal] 2014,” Mr. Walkley wrote in a note to clients. “Further, we believe carrier support for BlackBerry 10 in the U.S. is modest, as demonstrated by Sprint only planning to launch the Q10 [BlackBerry with a physical keyboard] and T-Mobile only the Z10.”
Some early reports out of the U.K. indicated that some stores were seeing lineups on launch days and might even have sold out of specific devices – though some disputed that claim, when it was reiterated by RIM’s executives. Since RIM has not released a new lineup of BlackBerrys since August, 2011, strong interest and lineups from diehard BlackBerry fans is perhaps to be expected. One poll from Forum Research Inc. has indicated that RIM may sell as many as 2.6 million BlackBerry 10 devices in Canada over the next year.
In his note, Mr. Walkley reiterated a sell rating and a $9 price target.