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The BlackBerry Z30 is shown in a handout photo. The smartphone maker says Rogers Communications has decided not to stock the new Z30, a touch-screen model similar in size to a Samsung Galaxy 4, when it's released on Oct. 15.
The BlackBerry Z30 is shown in a handout photo. The smartphone maker says Rogers Communications has decided not to stock the new Z30, a touch-screen model similar in size to a Samsung Galaxy 4, when it's released on Oct. 15.

BlackBerry snubbed at home as Rogers decides not to sell newest model Add to ...

With BlackBerry Ltd.’s business in a broad free fall, even Canada appears to be giving its homegrown smartphone maker the cold shoulder.

Late Tuesday, the company revealed that second-quarter revenue in Canada collapsed 60 per cent compared with the same period a year earlier, coming in at just $91-million (U.S.). That was the steepest drop of any market in which it operates, save for Latin America, where revenue fell 62 per cent.

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Then on Thursday, one of the company’s longest-standing partners, Rogers Communications Inc., said it wouldn’t stock the company’s new high-end flagship touch-screen phone, the Z30, in its stores.

Rob Bruce, Rogers’ president of communications, played down what he called a “routine decision” made months earlier, saying the carrier only has room on store shelves for 15 to 17 smartphone models “and we pick what we think are the biggest winners” from among the many manufacturers. He pointed out that Rogers had in the past chosen not to stock other BlackBerry products and said Rogers continues to stock and sell the company’s recently released Z10 all-touchscreen and Q10 touch and keyboard phones.

“This doesn’t have anything to do with whatever anyone thinks is going on with BlackBerry,” Mr. Bruce said. “People are trying to attach some significance to this decision. There isn’t any.”

Still, Rogers’ decision to hang up on the Z30 – the fourth phone launched on the new BlackBerry 10 platform – could be viewed as a setback, particularly given the long, close ties between the companies. Their business relationship dates to the 1990s, including a milestone order for the Waterloo, Ont., company’s wireless e-mail devices 13 years ago. Last February, Rogers launched the new generation of BlackBerry 10 phones at company headquarters with the CEOs of both companies in attendance.

A BlackBerry spokesman declined to comment on Rogers’ decision, but said “it’s important to note we are seeing broad support in Canada for the Z30.” Indeed, both Bell and Telus said they will stock the Z30.

BlackBerry has in the past been criticized for offering too many smartphone models, while its market share has dwindled markedly in the past four years as consumers turned to all-touchscreen smartphones featuring Apple and Google platforms. The BlackBerry 10 products were supposed to deliver an up-to-date user experience, but came out two years too late a result, in part, to delays caused by internal challenges.

The company has also been criticized for coming to market first with an all-touchscreen Z10 rather than leading with the Q10, with a keyboard familiar to loyal users. “It would have been best for the company to consolidate and secure its base first,” industry analyst Rob Enderle said. “If you lose your base you pretty much lose the battle.”

The move comes a week after a senior executive with U.S. wireless provider T-Mobile USA Inc., said it would no longer carry BlackBerry smartphones in its retail stores.

Raymond James analyst Steven Li said the company’s revenue drop-off in Canada is no different than elsewhere, and noted the sharp decline was in part a result of the fact that the company began applying a stricter test to determine when to recognize revenue in the second quarter. In past quarters, the company recognized revenue when it sold into distribution channels while, under its new test, revenue more accurately reflected sales to actual end-users. “What [the sharp revenue drop] tells me is demand is not there,” he said. “Every geographic region is down a lot.”

Some analysts believe BlackBerry’s cost-cutting efforts, its $2.6-billion cash pile and lack of debt leave it in good enough shape to sustain itself through an expected takeover. But Bernstein analyst Pierre Ferragu sounded a more pessimistic note Thursday, cutting his price target on the stock to $4.50 based on expectations the company will quickly burn through most of its cash by early 2015.

Editor's note: An earlier version of this story incorrectly spelt the last name of industry analyst Rob Enderle. This version has been corrected.

Follow on Twitter: @SeanSilcoff

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