Research In Motion is seeking an investigation into a U.S.-investment firm that said customers are returning their new BlackBerry smartphones in droves, but the research firm that made the suggestion stands by its analysis and says it has nothing to gain from spreading bad news.
The Waterloo-based company is asking the Securities and Exchange Commission and the Ontario Securities Commission to investigate what it calls a “false and misleading” report by Boston’s Detwiler Fenton & Co. that suggested a “worst case scenario” could be playing out with Research In Motion’s new Z10 smartphone.
The analyst’s report suggested that although sales have been brisk since the smartphone launched in the United States in March, users appear to be growing frustrated after using the device for any amount of time and end up taking the phones back to the store for a refund.
“We are confident in our research methodology and we welcome any regulatory inquiry,” Detwiler Fenton’s chief compliance officer said in a statement Friday.
“Detwiler Fenton is not the only research provider publishing similar notes regarding customer reactions, sales and returns of BlackBerry Z10. It should also be noted that neither the research analyst nor any officer or director of Detwiler Fenton has any financial interest in BlackBerry.”
Research In Motion’s chief legal officer Steve Zipperstein suggested that the company’s shareholders could be hurt by the report, which doesn’t contain any information about methodology. The company’s shares were trading flat Friday afternoon.
“Everyone is entitled to their opinion about the merits of the many competing products in the smartphone industry,” he said. “But when false statements of material fact are deliberately purveyed for the purpose of influencing the world’s markets a red line has been crossed.
RIM’s chief executive officer Thorsten Heins said sales of the device were meeting expectations, and U.S. carrier Verizon Wireless said it hasn’t experienced unusually high rates of return from its customers.
“The data we have collected from our retail and carrier partners demonstrates that customers are satisfied with their devices,” Mr. Heins said. “Return rate statistics show that we are at or below our forecasts and right in line with the industry. To suggest otherwise is either a gross misreading of the data or a willful manipulation. Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged.”
Neither the SEC nor OSC would comment on RIM's filing but acknowledged they had received it.
At the end of March RIM posted a fiscal fourth-quarter profit of $98-million, a surprisingly solid result against expectations of a loss, suggesting a positive sales start for the all-important BlackBerry 10 lineup.
But many analysts haven’t been impressed, and are concerned that the company won’t be able to compete with rivals such as Apple and Samsung with its new generation of devices. Of the 44 analysts Bloomberg lists as following the company, 21 have “sell” ratings, 14 have “holds” and only nine advise their clients to “buy.”