BlackBerry Z10 branded a sales flop
BlackBerry’s stock has been downgraded after an influential analyst suggested the company’s new Z10 smartphone is a sales flop.
The Z10 went on sale in the US at the end of last week, but a Goldman Sachs survey of US phone retailers found that some retailers were only selling two or three Z10s a day over the weekend. Citigroup, meanwhile, reported that fewer than 5% of retailers had sold out of the device, even though some stores only had a dozen units.
The findings prompted Goldman Sachs to cut its rating on BlackBerry to “neutral” from “buy”. Goldman cited little marketing support from the company and apparently low sales.
The damning sales reports come ahead of BlackBerry’s quarterly results, which are due out on Thursday.
The Goldman report, coupled with other media and analysts’ reports of a flat US debut, have pulled down the volatile stock more than 11 percent on the Nasdaq since Friday.
BlackBerry unveiled the Z10 on 30 January and has reported fairly solid demand for it in its home country, Canada, and in other countries such India and the United Arab Emirates, where BlackBerry still has a strong brand and presence.
But the late debut in the US, due to a longer carrier testing process, and the muted reception there has cast doubts on BlackBerry’s chance of a turnaround.
The Z10 is the first in a line of devices that will be powered by BlackBerry’s new BB10 operating system. It is a key part of the company’s attempt to regain relevance and win back market share in the smartphone arena that it once dominated.
But delays in transitioning to the new platform have hurt BlackBerry’s fortunes, and the company has ceded much ground to rivals such as Apple’s iPhone, Samsung’s Galaxy line and other Android-powered devices.
“It remains to be seen if BlackBerry 10 can gain mainstream acceptance against Android and iOS,” said Sterne Agee analyst Shaw Wu, who still expects BlackBerry to meet or beat investor expectations when it reports its fiscal fourth-quarter results on Thursday, driven by momentum around the Z10.
“We anticipate a decent quarter as expectations are low,” Wu said. “However, we remain on the sidelines as we are concerned with lack of profitability.”