BlackBerry has probably reduced production of its new Z10 line of phones due to poor early sales, a U.S. analyst has said.
The news from Wedge Partners analyst Brian Blair caused BlackBerry’s stock to turn negative on Thursday, after initially starting out the day strongly.
“We believe Blackberry has trimmed their production expectations for the Z10 for the remainder of calendar year 2013,” Blair wrote in a note, as quoted at Barron’s. “We estimate that the company may have trimmed Z10 production units by 4-6 million units for the year. If accurate, these cuts would mark a meaningful hit to Blackberry’s own expectations and full year units will come in well below consensus views.”
BlackBerry shares were up 3.3 per cent for the day in New York until the news broke, sending the shares down 0.5 per cent below opening levels as of noon, Bloomberg reported.
Waterloo, Ont.-based BlackBerry unveiled its full-screen, touch-screen smartphone, the BlackBerry Z10, in January. The Q10, the company’s new phone featuring its signature physical keyboard, is due to arrive in Canadian stores on May 1.
There have been numerous conflicting reports about how the Z10 has been doing since it went on sale in the past few months.
Canadian cellphone retailer WirelessWave gave BlackBerry some good news when it reported the Z10 was outselling Apple’s iPhone and Samsung’s Galaxy phones at its outlets. But that may have been simply due to a “bump” in BlackBerry sales due to the fact the Z10 is a newly released phone.
And though BlackBerry has asserted the Z10 has broken sales records for the company, analysts aren’t so sure. Canaccord Genuity reduced its estimates for first-quarter Z10 sales to 300,000 from 1.75 million.
Most recently, analysts from Detwiler Fenton caused a commotion with a report that the Z10 is seeing abnormally high levels of returns. An outraged BlackBerry denied the report, and asked securities regulators in the U.S. and Canada to investigate.
Jefferies telecom analyst Peter Misek countered that return rates for the Z10 appear to be normal for a smartphone.
A clearer picture of BlackBerry’s situation will emerge when the company reports first-quarter earnings in June.
Alicia Keys Is BlackBerry's Mercenary
At the BlackBerry 10 launch event, CEO Thorsten Heins introduced singer Alicia Keys as the company's new global creative director. Sure, Keys is a familiar and likable face to hawk your product -- but how has writing "Girl On Fire" prepared her for a creative director role? Adding to the awkward is that she's a <a href="http://gizmodo.com/5980200/blackberry-spokesperson-alicia-keys-tweets-from-her-iphone">prolific Twitter user from her iPhone</a> and Instagram's quite a bit, a program which isn't available on BlackBerry's new operating system yet. She claimed at the event that she'd been lured back into the BlackBerry fold by the new phones.
A Gimmicky Hair Cut, Less Cracking On CrackBerry.com
Kevin Michaluk, owner of the premier BlackBerry fansite and blog "CrackBerry" had promised to not cut his hair until the release of BlackBerry 10. Considering there were a <a href="http://www.sfgate.com/business/technology/article/A-look-at-RIM-s-much-delayed-BlackBerry-10-4236058.php">few delays along the way</a>, Michaluk had a nice batch of lettuce going. Though a nice gesture of his dedication, the reaction in house was timid. <a href="http://www.alexa.com/siteinfo/crackberry.com">Pageviews for Crackberry.com</a> have seen a steady dip.
Viral Marketing Fail
In an effort to build hype for the announcement of BlackBerry's new operating system and phones, the company released <a href="http://www.youtube.com/watch?feature=player_embedded&v=MiSzaWxRUSk" target="_hplink">this video</a> one day before the launch. The video involved a cable controlled jump with Alec Saunders, BlackBerry's VP of developer relations, and BlackBerry exec Marty Mallick. During the jump Mallick lets out a barely enthusiastic "BlackBerry 10 ruleeesssss!" The video only had 6,000 views prior to the launch event.
RIM Is Now.. BlackBerry! But Who Cares?
During the BlackBerry 10 launch event, it was revealed that Research In Motion or RIM, BlackBerry's creator, would be <a href="http://www.huffingtonpost.com/2013/01/30/rim-changing-name-to-blackberry_n_2581969.html?utm_hp_ref=technology">changing its name</a> to...BlackBerry. More than anything this seems to signal that the BlackBerry is all or nothing for what was formerly RIM -- they have nothing to fall back on.
Many Twitter users were quick to point out <a href="https://twitter.com/search?q=blackberry%20palm&src=typd">the launch of BlackBerry 10 to another doomed launch</a>, that of the the Palm Pre for Palm. The company announced the new phone and OS in January 2009, only to be <a href="http://money.cnn.com/2010/04/28/technology/hp_palm/index.htm">scooped up by Hewlett Packard in April 2010</a>.
Also on HuffPost:
The BlackBerry Z10 Launch, Jan. 30, 2013
RIM CEO Thorsten Heins
RIM Co-founder Mike Lazaridis
RIM CEO Thorsten Heins
Singer Alicia Keys has been appointed BlackBerry's global creative director.