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  1. kelexiong's Avatar
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    Default Bgr: New reports throw cold water on blackberry z10 sell-outs

    BlackBerry’s (BBRY) first next-generation smartphone launched in the UK last week and early demand seemed strong. A number of retailers reported stock-outs on day one, and BlackBerry UK general manager Stephen Bates said early sales exceeded all of its launch partners’ expectations. A potential problem may arise, however, if expectations weren’t very high to begin with — several new reports suggest early Z10 sales may not be as impressive as we thought.

    A number of industry watchers followed up the BlackBerry Z10′s launch in the UK with customary checks at various retailers. While these checks did reaffirm earlier reports of widespread stock-outs, they also found that by and large, retailers didn’t have many Z10 handsets to begin with.

    “Checks at 40 stores in Canada indicate sell-through of the BlackBerry Z10 smartphone is strong on its launch day, with numerous stores selling out towards the end of the day,” RBC Capital Markets analyst Mark Sue wrote in a note to clients on Wednesday. “Z10 pre-orders reached record highs (for BlackBerry).”

    That’s the good news. Sue tossed some cold water on the report though, noting very short Z10 inventory across all of the stores he spoke with. “Supply appears limited, with stores allocated avg. 5-10 units/store for walk-ins and est. 20-30 units/store for pre-orders,” the analyst wrote.

    Sue continued, “Sell-through of the BlackBerry Z10 in the UK is exceeding RIM’s expectations, with some stores sold out as well. The Z10 now ranks #4 on uSwitch UK’s website ahead of the Nexus 4 and Lumia 920 (#1 remains iPhone 5). BlackBerry will launch the Z10 in other parts of Western Europe this week. Bear in mind however, BlackBerry’s presence in those countries combined is less than its sub base in the UK.”

    Fellow Canadian firm Canaccord Genuity found much of the same. “Our U.K. store surveys post the recent launch of the Z10 smartphone indicated solid initial sales. However, limited initial supply was cited as the reason for early post-launch stock-outs at some carrier stores versus overwhelming demand,” analyst T. Michael Walkley wrote in a separate note to investors on Wednesday. ”In fact, our surveys indicated most stores received less than 15 units and sold a majority of these units over a two- to three-day period, leading to initial stock-outs at a few stores and low inventory levels at others.”

    He continued, “While we are impressed with the features of the new BB10 OS and Z10 smartphone, we believe BlackBerry has only closed the gap with more mature smartphone OS platforms and offers limited differentiating services or features to win back customers from more mature ecosystems.”

    Over at Pacific Crest, analyst James Faucette agrees that the BlackBerry Z10 is in short supply but he thinks this is no accident. “We have canvassed retailers across the United Kingdom for five days to develop a complete picture of the response to the BlackBerry launch,” the analyst wrote in a research note on Tuesday. “Our conclusion is that BlackBerry seems to be following a strategy of deliberate scarcity for the Z10, similar to what other manufacturers have done in recent high-profile launches.”

    Faucette notes that BlackBerry might be headed down a bumpy road, however, as similar launches where vendors worked to manufacture demand regularly backfired.

    “The launch of the Z10 has shown more early demand than other high-profile but ultimately severely disappointing launches in the past few years,” the analyst noted. “In those cases, there was excess inventory by the end of the first full quarter of shipments.” According to Faucette’s estimates, the BlackBerry Z10′s quarterly run rate will land between 100,000 and 150,000 units in the UK following the February quarter.

    “The United Kingdom has accounted for approximately 10% of BlackBerry sales over the past few years, which implies global demand of roughly 1 million to 1.5 million units per quarter which we believe would be a disappointment,” Faucette added. “Further, we would note that given the Z10’s high price point, we believe the U.K. could end being a higher percentage of the global market for the Z10 than for BlackBerry overall.”

    Whether or not BlackBerry is off to a fair start, RBC’s Mark Sue says that the biggest challenges still lie ahead.

    “The toughest challenge for BB10 is re-gaining consumer smartphone share in the crucial US market,” Sue wrote. “So far so good, yet BB10 needs to overcome user lock-in to Android and iPhone content ecosystems. Samsung’s new GS4 may come earlier this year, as well as Apple’s refresh, making it an even tougher environment in the spring. Microsoft (MSFT) also surpassed BlackBerry in the US for the first time since 2006.”
    Source: BlackBerry Z10 sales: UK sell-outs may be less impressive than thought | BGR
  2. emstardeluxe's Avatar
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    Is it me, or does the text not match the headline?
    Last edited by emstardeluxe; 02-06-2013 at 10:55 AM. Reason: I can't read
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  3. cjcampbell's Avatar
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    Wow... A real news article from BGR!! I'm extremely surprised that an article that's straight, to the point, and based on analyst reports, appeared on BGR without any personal or slanderous attacks on BB. I wonder if the legal dept at BB has gotten in touch with them regarding previous non truths they have reported.
  4. kelexiong's Avatar
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    Last edited by kelexiong; 02-06-2013 at 11:14 AM.
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  5. Zarpan's Avatar
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    I'd have to say that I'm skeptical about Faucette's math. By most accounts (including his), the Z10's launch has been stronger than any recent non-Samsung/Apple launch. Yet his projected quarterly UK run rate of 100-150k based on the launch sales for the Z10 would imply a market share of 1-2%. I find it hard to believe that the 3rd best launch (among manufacturers) would only imply a 1-2% share long-term. Not to mention that BlackBerry's UK market share was at 6% recently with the old devices.
  6. #6  

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    i think sales of 1-1.5 million per quarter from the UK isnt bad at all really Some people have extremely high expectations of what BB will do i think.
    ~Matt
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  7. Zarpan's Avatar
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    Quote Originally Posted by howarmat View Post
    i think sales of 1-1.5 million per quarter from the UK isnt bad at all really Some people have extremely high expectations of what BB will do i think.
    Faucette is saying 1-1.5 million per quarter globally though, and 100-150k from the UK. The quick model I made estimated BB sales of around 1 million per quarter from the UK (about 13% market share), so I'd be pretty happy with that.
  8. cjcampbell's Avatar
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    Quote Originally Posted by howarmat View Post
    i think sales of 1-1.5 million per quarter from the UK isnt bad at all really Some people have extremely high expectations of what BB will do i think.
    If just in the UK, sure, but his numbers were globally, which would be a disapointment. There's a fine line of folks like us, that tend to over estimate volume, and the bears that underestimate the volume. Until someone releases hard numbers, and most likely not until the March ER, it's all going to be speculation. Unfortunately, the US market won't be a part of those numbers.
  9. EchoTango's Avatar
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    lol......Factual in parts but heavily negatively biased in the speculative parts.

    Folks......this is very early days. The Z10 has been available in the UK for a week and in Canada for a day ! Nobody should be expecting an iPhone-like response, BBerry hasn't got that level of market clout. Our "friends" at BGR and the other media outlets are trying hard to explain why a solid launch is happening and why is can't last. Their mindset is so closed off (or fully bought) to anything other than iPhone that they can't perceive reality and will try and bridge it with conjecture and just plain lies.

    We're seen this for three years now and it's only going the get worse as the US launch date gets closer. My worry is they'll have the US consumers so scared and confused that they won't know what to think once the launch day arrives and will be terrified to leave the warm embrace of Apple.
  10. q649's Avatar
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    If there are any RedFlagDeals forums fans here, check out the Z10 thread:

    [Elect] [UPDATED] BlackBerry Z10 $39/$139 on FLEXTab at ROGERS LIMITED TIME* Feb 5th Release! - Page 44 - RedFlagDeals.com Forums

    Lots of people searching for the Z10, calling multiple places, seems to be sold out in many markets. In the markets where the phones are available, most will not sell the phone outright, and are holding on to them to sell with plans.
    BocaJuniors likes this.
  11. #11  

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    damn ok, yeah 1-1.5 globally sucks balls
    ~Matt
    Nexus 5, Z10 LE, White Lumia 521, 32GB Nook HD+ & 16GB PB, 32 GB Dell Venue 8 Pro
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  12. agp101's Avatar
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    I enjoyed the accusation that BlackBerry intentionally limited supply to highlight "sellouts". It's just that: an opinionated accusation with no factual basis. Is it possible? Yes. Is it also possible that BlackBerry didn't want to have overstock (like the past year; they can't afford to do that again) and to sort of test the market? Yes, that's actually even more sensical and logical.

    It's so tough to co-exist with analyst reports and blogs in general today. In a research methods course one of the first things you learn is that no matter how much research goes into an article, it can never be perfect and without some form of error. But today, it's just way past this point... I find I literally have to pick apart all the subjective, opinionated, and probable erroneous news from every paragraph and even every sentence.

    The picture is always painted with such high contrast that it's not even news anymore. It's just "an entertaining read" with amplified prettiness for the readers through these bright, irregular colors this high contrast painting conveys.
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  13. drummer_god's Avatar
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    this is assuming the Z10 is the only phone released by BlackBerry this year.
    1.5 million Z10 sales sold globaly, but what about Q10 sales? or the low and mid-tier devices?

    also, they are making projections based on less than 1 week of sales in the UK and 1 day of sales in Canada.
    more time is needed to make accurate projections.
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  14. W Hoa's Avatar
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    Quote Originally Posted by howarmat View Post
    damn ok, yeah 1-1.5 globally sucks balls
    Two months ago one prominent analyst, I belive he was from Jefferies, wrote that if BB10 could generate worldwide sales of 1.5 to 3 million in its first full quarter it would be deemed a success. Another, Scotiabank analyst Gus Papageorgiou said last October "Mr. Papageorgiou says that even a mildly successful launch — nothing like the iPhone 5′s five million units in a single weekend — could spell huge upside for RIM."

    BlackBerry doesn't need to sell huge numbers. It just needs to show that it has the potential to crawl out of the hole it has dug itself.
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  15. dbmalloy's Avatar
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    Could also be a more interesting reason.... In the stock market there are millions of shares that have been shorted by investors...in essence they are betting the stock would tank.... no wait.. you do not think any anyalyst would knowingly write a negative report to benifit themselves.... would they.....
    sok2507 likes this.
  16. drummer_god's Avatar
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    ferrari doesn't sell a lot of cars when compared with hyundai, but they're doing alright..lol
  17. #17  

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    Quote Originally Posted by W Hoa View Post
    Two months ago one prominent analyst, I belive he was from Jefferies, wrote that if BB10 could generate worldwide sales of 1.5 to 3 million in its first full quarter it would be deemed a success. Another, Scotiabank analyst Gus Papageorgiou said last October "Mr. Papageorgiou says that even a mildly successful launch — nothing like the iPhone 5′s five million units in a single weekend — could spell huge upside for RIM."

    BlackBerry doesn't need to sell huge numbers. It just needs to show that it has the potential to crawl out of the hole it has dug itself.
    maybe for the first full quarter since it wont be on all markets but they need alot more than that for future quarters.
    ~Matt
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  18. theegoldenone's Avatar
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    Quote Originally Posted by drummer_god View Post
    ferrari doesn't sell a lot of cars when compared with hyundai, but they're doing alright..lol
    Terrible analogy......
  19. FSeverino's Avatar
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    Quote Originally Posted by howarmat View Post
    i think sales of 1-1.5 million per quarter from the UK isnt bad at all really Some people have extremely high expectations of what BB will do i think.
    do you happen to remember the 'break even' number of devices that BB had to sell to turn a profit? I cant find it anywhere now that I want to lol
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  20. W Hoa's Avatar
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    Quote Originally Posted by howarmat View Post
    maybe for the first full quarter since it wont be on all markets but they need alot more than that for future quarters.
    I don't disagree. For perspective it is interesting to see first quarter launch figures for other new OS's - the shipments of iPhone, Android and Windows Phone devices did not exceed 1.1 million, 0.8 million and 0.9 million, respectively, in the first three months after they were launched.

    These are shipped figures - not sell through figures.

    Source: Informa Analyst Comments Ahead Of BB10 Launch
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  21. lnichols's Avatar
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    Quote Originally Posted by W Hoa View Post
    Two months ago one prominent analyst, I belive he was from Jefferies, wrote that if BB10 could generate worldwide sales of 1.5 to 3 million in its first full quarter it would be deemed a success. Another, Scotiabank analyst Gus Papageorgiou said last October "Mr. Papageorgiou says that even a mildly successful launch — nothing like the iPhone 5′s five million units in a single weekend — could spell huge upside for RIM."

    BlackBerry doesn't need to sell huge numbers. It just needs to show that it has the potential to crawl out of the hole it has dug itself.
    I think that if BlackBerry had the supply out there, and the phone would have launched in more markets at once, including the US, they could have had a 3 Million+ device opening weekend based on pent up demand. However, with the launch shaping up like it is with few launch markets and low inventory, the first quarter is going to look weak. Combine this with some stupid decisions from BlackBerry like making the white Z10 a Verizon exclusive in the US (seriously BlackBerry just stop the exclusive anything, it doesn't benefit the end user and people won't switch for a white phone, but might not upgrade if they can't get one), and it seems like BlackBerry's launch strategy is either not going to plan, or was planned poorly. It would be very interesting to know just how many phones RIM had manufactured for this global launch to see if it is an issue of RIM not supplying enough product, or carriers not acquiring enough product from them.
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  22. Geeoff's Avatar
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    I strongly reccommend that everyone read the negative comments carefully.

    Some negative comments are very valid. For example, I bought my Z10 yesterday at the big mall in downtown Toronto (Eaton Centre). I talked with the manager and he did say that the stock they were given was a bit small (15-20 units for walk-ins, not including pre-orders), but he expected to be sold out by early afternoon. So it seems to me that the truth about initial sales is in between. Yes, stores are not being given a lot of stock, but they are selling out what they do have. .... That doesn't sound too bad.

    Secondly, the analyst in the article is talking negatively about BB, but then he says, "..we are impressed with the features of the new BB10 OS and Z10 smartphone..." When people say positive things even though they are trying to highlight negatives, then it bodes well for BB!

    Maybe I should start a new thread focussing on negative comments partly to learn about Z10's weaknesses, but also to assess whether there is truth in the dire predictions. We can learn a lot about Blackberry by examining the negative comments that are made. For example, when negative articles focus only on last year's results, then it doesn't concern me too much. However, if the negative articles had said that the new OS is junk, then that would have been a problem.
    kelexiong likes this.
  23. drummer_god's Avatar
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    compared to reports that most stores only stocked 3 windows-8 phones for windows to claim 'sell-outs', it's still very impressive.
  24. #24  

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    Quote Originally Posted by FSeverino View Post
    do you happen to remember the 'break even' number of devices that BB had to sell to turn a profit? I cant find it anywhere now that I want to lol
    18 million
    ~Matt
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    @howarmat
  25. darkehawke's Avatar
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    i dont get it. If it has exceeded exp[ectations, that is still impressive, regardless of how low expectations are to begin with.

    It still means better then expected, which is the right direction to be moving
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