RBC Dominion Securities analysts are raising the number of BlackBerry 10 smartphones they expect Research In Motion Ltd. to sell in fourth fiscal quarter because of the positive momentum the new BlackBerry Z10 seems to be having with retailers and wireless carriers around the world.
RBC raised its sales estimates for the February quarter from 350,000 BlackBerry 10 phones to 500,000 devices, maintaining an estimate of 2 million BB10 devices for the May quarter to come.
Citing strong interest in the U.K. and other markets as well as a massive 1 million unit order of BlackBerry 10 phones from one of RIM's "established partners" – which the Waterloo, Ont., company announced on Wednesday – RBC analysts Mark Sue and Paul Treiber wrote in a note to clients on Thursday that "numerous data points suggest Feb-(quarter) BlackBerry 10 sell-through is stronger than Street expectations."
At the same time, however, RBC warned that there was still a lot of uncertainty surrounding RIM's comeback attempt. The RBC analysts drew back their estimate for the number of older, "legacy" BlackBerry they expect RIM to sell in the same quarter from 6.7-million to 6.3-million. They also warned that RIM's overall "success depends on the crucial U.S. market," which is the BlackBerry maker's largest single market despite a broadly successful overseas expansion in recent years, but that this will be "probably the most difficult to recapture."
RIM shares continue to be volatile, jumping 8 per cent on Wednesday on news of the large order and soaring nearly 14 per cent on Monday on another takeover rumour. The unexpected delay to the phone's availability in the U.S. has added to the confusion, leading some analysts to slash their original sales expectations for the quarter – which includes devices sold up until March 2 – given the sheer size of the U.S. market.
Still, given the last new batch of BlackBerrys launched in August, 2011, there appears to be a lot of pent-up demand.
"BlackBerry loyalists (are) eager for a modern platform," the RBC analysts write.
But, noting that the large U.S. carrier Sprint had decided to skip launching the BlackBerry Z10 touchscreen device and only launch the keyboard-centric upcoming BlackBerry Q10 device, they added, "Carrier support and advertising plans appear tepid... Early checks of pre-orders at AT&T show much less consumer interest than in Canada and the U.K., particularly as it is only weeks before Samsung's new (Galaxy S4 smartphone). Soon to be lower-priced (Galaxy S3s) may be the biggest headwind for BB10."
RIM, which has announced vague signs of demand for the Z10 phone, which launched on Jan. 31 in the U.K., reports fourth quarter results on March 28 – when, for the first time, industry observers will get their first real glimpse at how RIM's make-or-break new lineup of BlackBerrys is actually selling.