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RIM earnings to give first look at BlackBerry 10 sales figures

RIM’s earnings will give a realistic look at the company’s comeback as actual sales figures will be revealed.


Since January, patient BlackBerry fans from Oman to Ireland have finally been able to buy Research In Motion Ltd.'s new Z10 smartphone as it launched in various markets around the world.

But only this week will investors get a clear view of whether the sleek, touchscreen devices – hailed as the best BlackBerrys ever – are tumbling from store shelves in enough numbers to bolster RIM's flagging sales.

RIM, which has rebranded the company as BlackBerry, will issue its fourth-quarter financial results Thursday, reporting for the first time since it launched its make-or-break phone. The company, which has lost market share to Apple Inc. and Samsung Electronics Co. Ltd., will release fresh figures that stretch from the Z10's Jan. 31 launch in the U.K., through the Indian launch on Feb. 25 and up until March 2.

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For the first time, industry observers will see actual sales numbers rather than vague reports of retail stores selling out, though sales in some big markets, such as the United States, Indonesia, Spain and Nigeria, won't be counted, since the device launched in those countries after March 2. That gives the company some leeway in explaining just how successful the Z10's launch has gone so far, but analysts will still be poring over the results to get a sense of the new BlackBerry's forward momentum – and a cold, realistic look at the state of the company's comeback.

There is hope that RIM could have sold upward of 1 million BlackBerry Z10s in the relatively short window. Byron Capital Markets analyst Tom Astle expects slightly less than that figure now, but, like other analysts, expects the new phones to have a high average selling price, or ASP – propping up a key metric in the handset industry that hints at the price most devices can demand.

"We are more hopeful for margins as we think initial sales of the Z10 have carried strong ASPs," Mr. Astle wrote in a recent note to clients.

But there is no escaping the harsh conditions the Waterloo, Ont.-based technology company is facing out there in the global smartphone industry. Apple and Samsung , which are far bigger than RIM, are winning customers in a sector with a punishing pace of innovation, declining margins and a product that is becoming increasingly commoditized.

Ehud Gelblum, an analyst with Morgan Stanley who upgraded RIM last week , still has a grim laundry list of things he expects to happen to RIM in the near term. He says the total subscriber base is likely going to fall as new BlackBerry Z10 sales don't compensate for falling sales of older devices. Market share will continue to contract, he suggests, and new revenues from RIM's mobile device management business will fail to make up for the lucrative but dwindling service fees RIM hauls in from wireless operators around the world.

"We continue to believe (BlackBerry) is unlikely to emerge as a strong (third operation) and that BB10 primarily sells into existing BB7 users, not Android or iOS converts," Mr. Gelblum wrote in a note to clients. "However, in contrast to our prior thinking, we now believe there may be room in the handset market for niche mid-range players."

Kris Thompson, an analyst at National Bank Financial, said he will be looking for information on the upcoming release of the BlackBerry Q10 – which runs new software but retains a physical keyboard – as well as clarity on the ASPs of older BlackBerrys, and whether they are holding up. He expects the company's subscriber base to decline by about 1.9 million, compared to a decline of 1 million in the third quarter, which brought the world's sum total of BlackBerry users to about 79 million.

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