BlackBerry is relying on new phones running new software called BlackBerry 10 to fuel their comeback after the company’s market share plumped thanks to Apple’s iPhone and Google's Android software.
A high impact launch event in New York was followed by a gradual, global rollout of the first BlackBerry 10 phone – the full touchscreen Z10 device– in the U.K., Canada and in the Middle East.
An unexpected delay in the BlackBerry 10's availability in the crucial U.S. market led some analysts to cut their sales estimates– and given the size and importance of the U.S. smartphone market.
BlackBerry is seeing some positive news in the figures about the sales of its new touchscreen-only BlackBerry Z10 device. While the device has not yet shipped in the U.S., it's was confirmed on Friday that the Z10 is actually cannibalizing Android and iOS sales in the market's where it launched so far.
While sales data has been scarce, the company will report its fiscal fourth quarter financial results on March 28 2013. Those results include sales from early December -- prior to the BB10 launch -- through March 2. That will be the first official look at whether or not BlackBerry has a hit with BlackBerry 10.
Sales of BlackBerry’s make-or-break line of smartphones are running faster than expected in Germany, and the company has increased production to keep up, according to CEO Thorsten Heins.
BlackBerry does not want to publish sales figures for the BlackBerry 10 smartphone, launched in January 2013, until it has observed the trend in sales over a longer period. No CEO wants to make comments based on a limited number of data points, it is just too darn risky for a new product.
Heins did say that sales “are above our own expectations and our target was thoroughly ambitious […] and we’ve increased our production capacity in the meantime." There is no indication of by how much and if initial production was deliberatley kept low to reduce financial risk.
Some early reports out of the U.K. indicated that some stores were seeing lineups on launch days and might even have sold out of specific devices – though some disputed that claim, when it was reiterated by BlackBerry’s executives.
Since BlackBerry has not released a new lineup of BlackBerrys since August, 2011, strong interest and lineups from diehard BlackBerry fans is perhaps to be expected.
One-third of Z10 sales in the UK have been made to customers who did not already own BlackBerry smartphones.
BlackBerry’s Z10 is outselling both Apple and Android flagship phones -- the iPhone 5 and the Galaxy S III -- at a major Canadian retailer. That retailer is Burnaby, B.C.-based Glentel Inc., which said, earlier this week, that the new Z10 model was “the leading smartphone” sold within its 330 Canadian Wirelesswave and Wave sans Fils retail stores since the device’s launch on Feb. 5.
Over one-half of BlackBerry Z10 sales in Canada have been made to users coming from other platforms.
One poll from Forum Research Inc. has indicated that BlackBerry may sell as many as 2.6 million BlackBerry 10 devices in Canada over the next year.
Canaccord Genuity and analyst Mike Walkley have already slashed his sales estimates for BlackBerry's make-or-break smartphone from nearly two million devices down to just 300,000.
Walkley specified that this was his first sales estimate cut since the U.S. delay was revealed, says his checks with retail stores indicate steady, but modest demand, and that wireless carriers – after initial reports of strong interest – are being cautious with how many devices to order from BlackBerry.
Generally, BlackBerry sells phones to carriers, who then sell the devices through their own retail chains. Samsung and others are likely to have sleek, newer devices ready to launch in the U.S. when BlackBerry’s devices finally make it to this important market.
“With new BB10 smartphones launching in the U.S. only in mid-March or later at subsidized prices no better than competing high-end Apple/Samsung smartphones… we are lowering our BB10 sales estimates for the February quarter and all of [fiscal] 2014,” Mr. Walkley wrote in a note to clients. “Further, we believe carrier support for BlackBerry 10 in the U.S. is modest, as demonstrated by Sprint only planning to launch the Q10 [BlackBerry with a physical keyboard] and T-Mobile only the Z10.”
Does this mean that BlackBerry has poached users from other platforms? Not exactly. Even if 50 percent of buyers are BlackBerry converts, it still doesn't confirm the number of handsets that have been sold, and the best indication of the platform's success won't come until it goes on sale in the U.S. BlackBerry has apparently ramped up production to keep up with handset demand, and it has released its first software update.
There were also rumblings that the sales of the BlackBerry Z10 in both the UK and Canada had apparently been grossly overestimated and there are still no official sales numbers to speak of.
Deutsche Bank's Brian Modoff had surveyed 60 participating carriers and discovered that some of the locations in Canada were "sold out" of handsets because they didn't have much inventory to begin with, and stores in the UK were not sold out of units, which contradicts what was reported in the media.
Clear answers are not available at this time. Separating fact from marketing spin remains illusive.