The investment firm said it believes that shipments of the new BlackBerry devices in February will fall short of earlier predictions of just 300,000 units, a far cry from its initial estimate of more than 1.75 million.
The outlook adds to a polarizing view of the smartphone maker from the analyst community, which has a range of price targets from nearly $23 to as little as $9. Canaccord sits at the low end of those expectations.
The equities research unit of Canaccord Financial Inc. (TSX:CF) said Tuesday that its global surveys show initial sales have been mixed for the BlackBerry Z10, with limited supply rather than overwhelming demand behind post-launch shortages at some stores.
"Our follow-up checks have indicated steady but modest sales levels," said Michael Walkley, an analyst at Canaccord.
"We anticipate carriers will not build large inventory levels for BB10, consistent with prior BB7 high-end launches, and will initially stock modest levels given the weaker consumer demand for high-end BlackBerry smartphones."
Walkley reiterated a "sell" rating and price target of $9 for BlackBerry stock, though other analysts have recently upgraded their expectations for the smartphone maker.
Earlier this month, Citigroup increased its expectations for shares to an "outperform" at $19.50, while Jefferies is maintaining its "buy" rating of $19.50.
Bernstein Research has upgraded the company to "outperform'' with a target price of $22, an increase from $12.
Last week, National Bank analyst Kris Thompson reiterated his underperform rating of $10, with much of his concern focused on the staggered release of the BlackBerry Q10, a more traditional keypad version of the smartphone that won't hit stores until at least April.
Product delays have been a worry for some analysts in their outlook. While the new BlackBerry has launched in the U.K., Canada and the Middle East, the touchscreen version of the phone's won't land in U.S. stores until at least mid-March.
The slower debut could run into the U.S. launch of Samsung's Galaxy S4, which has been anticipated for around the same time, Walkley said. He has lowered sales expectations for not only the February quarter but also the rest of the fiscal year.
Shares of Blackberry have been volatile in recent months as the debut of the new phones last month gave the company's stock an extra surge. The company's stock is off about 19 per cent from the 52-week high it reached in late January.
On the Toronto Stock Exchange, BlackBerry (TSX:BB) shares were up 25 cents at $14.48 in trading Tuesday afternoon.
BlackBerry is also pulling out of Korea after its new devices gained little traction on the market where it is partnered with SK Telecom, one of the three local carriers. There are no plans to release its new touchscreen and keypad versions on the local market.
"We will continue to support the carrier's ongoing BlackBerry sales in Korea," BlackBerry said in an emailed statement.
"We will continue to provide BlackBerry service and after-sales support to BlackBerry's Korean customers, both consumers and business users."
BlackBerry has a market share of less than one per cent in South Korea, said Kevin Restivo, an analyst with IDC Corp. in Toronto.