Looking at Wall Street reactions to BlackBerry 10 launch

Thorsten Heins at the BlackBerry 10 Launch
By Chris Umiastowski on 1 Feb 2013 04:53 pm
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I've spent the last two days reading online BlackBerry Z10 reviews, getting used to my own device, and of course reading Wall Street analyst reports on the stock. I've had tons of requests to do a summary post outlining what Wall Street thinks along with my own perspective. So here it is. 

INITIAL MOVEMENTS

It's interesting to note that BlackBerry's stock price opened higher on Wednesday morning, prior to Thorsten taking the stage. It had closed at $15.66 the night before and then opened on BlackBerry 10 launch day at $16.08 climbing to a high of $16.62 in the first hour of trading. By 10:30 it was in free fall.

Why? It was really cool to see BlackBerry organize a global event the way they did. But because they had already rolled out Dev Alphas, posted tons of videos, and given so many demonstrations in media interviews over the prior months, there wasn't anything really new left to show off. Anyone paying attention wasn't surprised by any of the product details. Instead, we were (pleasantly) surprised by things like the renaming of the company, and the addition of Alicia Keys to Team BlackBerry.

Then to top it all off, BlackBerry confirmed that the US market will get the BlackBerry Z10 later than everyone else, and that the Q10 won't arrive until April. I already wrote about how we figured the US would be a bit later than other markets. But I was not expecting the Q10 to come two months after the Z10.

I completely understand the initial reaction by traders in the stock. Beyond that, analysts have the job of looking at the fundamentals, looking at the product details, and then publishing intelligent opinions about the situation. I expect analysts to be well balanced in presenting arguments, and honest about what they know versus what they don't know. Without naming names, I am rather disgusted by how many analysts seem to turn their reports into BlackBerry Z10 reviews without having spent that much time using the device.

Most of the media who got review devices had a week to test them. Analysts do not get review copies, and most of them haven't spent any real time with a Dev Alpha either. So most of them aren't qualified to render an opinion on the device. They should be sticking to financial analysis or digging up relevant industry data points. The good ones do.

Let's take a look at Wall Street's reactions. 

THE BULLS

Starting with the bulls, we have Goldman Sachs. Their analyst, Simona Jankowski, had a huge hate-on for BlackBerry over the last few years but she seems to buy into the turnaround. She seems focused on potential sales in Canada, the UK and other markets in February, along with the average selling price (ASP) effect it will have on BlackBerry's financial results. I find myself agreeing with her points, and I'm glad she hasn't tried to turn her report into a review. She thinks other analysts will have to raise estimates as these devices sell into the market, driving the stock price higher.

Next we have Tom Astle. He's been covering tech stocks longer that almost every Wall Street analyst, and his view is required reading. Tom points out that most media who had a week to review the Z10 loved it. See what I mean about the good analysts not trying to position themselves as device reviewers? Tom liked the well polished, coordinated launch, differentiated UI, and change in branding to BlackBerry. He worries a bit about the "slight delay" in US availability, UI learning curve and initial software version glitches and missing features. I can't argue with that.

On valuation, Tom thinks the company can post $1.60 in EPS next year but points out how much drift there can be in either direction because when doing a sensitivity analysis (i.e. how much things like ASP and gross margin change the outcome). Bottom line: BlackBerry is executing well and things are looking better.

I'm throwing RBC in the bull camp only because they have a $18 target price on the stock. But they do not have a buy rating on the stock, and the report is much more balanced. The analyst, Mark Sue, has a good reputation for looking at both sides of the story. That said, I found the RBC report didn't dig into issues much. It read more like a summary of what BlackBerry announced along with a nice table showing which apps BlackBerry has versus the top paid and top free apps in the iOS store. RBC points out that the BlackBerry 10 is differentiated enough to attract people who have grown tired of "the status quo of homogeneous devices".

I have not seen the initial Jeffries report on BlackBerry, but there is a thread over on the CrackBerry Forums where the Jeffries analyst believes several hundred thousand Z10s have already sold in the UK market with many stores now being sold out.

This brings up a good point. Yesterday we started seeing evidence of lineups in the UK. That, along with pre-order data from Canada, seems to be largely ignored by the market right now.

THE BEARS

Credit Suisse was, from my read, the most bearish on BlackBerry. Kulbinder Garcha is the analyst here, and he's been covering the stock for a few years now. I think dating back to the original Pearl. Long enough, in any case. 

He spent most of his time writing about the business model changes facing BlackBerry. I've written at length about the risks to service revenue. So much so that it pisses some of you readers off. But it is what it is. The risk is real and this is the major issue that bugs Credit Suisse. But let's face it - the launch on Wednesday does absolutely NOTHING to change any of this, so I'm not sure why he's picking this time to publish on the topic. Anyway, Kulbinder thinks that BlackBerry's service revenue will decline by almost a billion dollars over the next year.

What did he say about the actual product launch? Nothing positive. He shows no balance of view, which makes it hard for me to take the work seriously. I don't like reading reports where the author seems to pick and choose data points to make a case.

Credit Suisse is picking on a few things. First, he describes the hardware as "ok but nothing special". Seriously. First of all, the expert reviewers have all pretty much weighed in on this. RIM's hardware specs now match other high end phones.

He also seems to think that BlackBerry won't be able to gain traction in the high end market simply because Apple and Samsung are already there dominating. "The difficulty of gaining meaningful traction within the above $400 smartphone market is that there are entrenched competitors as Apple has enjoyed a market share of around 45% over the last 2-3 years, and we expect this trend to continue with the recent launch of iPhone 5."

This is rear view mirror analysis. It would be like evaluating the fast food market and saying that customers buy mostly pizza and hamburgers, so the guy who launches a Subway sandwich is bound to fail. Everyone just wants pizza and burgers.

Finally, Credit Suisse suggests that BlackBerry is #4 in terms of app ecosystem. They reference the 70,000 apps at launch without realizing, it seems, that there will be over 100,000 apps by the time the Z10 launches on US soil. I just can't take this guy seriously He's using a developer survey to suggest that developers are losing interest in BlackBerry rather than actually pay attention to the results (tons of big name games and apps in App World that were not present last year). Sorry, but surveys are just never going to be as good as measuring actual RESULTS.

Cannacord Genuity is another bear. They have a sell recommendation on the stock. Their headline includes "little differentiation versus [the] competition". The analyst is Mike Walkley, who has been around a long time and has a (generally) good reputation.

He doesn't believe the product is differentiated, and writes, "We are not sure this is enough to convince users to switch back to BlackBerry." Funny, why do these guys fail to notice that approximately 50% of Canadian pre-orders for BB10 came from customers who are not currently BlackBerry users. Unless they're all migrating from feature phones (unlikely for preorders), I think this evidence flies in the face of what the analyst is saying.

This report also brings up the service revenue risk. I'm in full agreement that this is a risk. However, I'm not really in agreement with his analysis.. Numbers-wise, Walkley thinks that BlackBerry has 18 million enterprise subscribers. That's aligned with my view, but he's saying revenue will be under pressure from the BYOD trend. This I don't agree with. BYOD connected to a BES will still generate revenue. It just (probably) wont' flow through the carrier. And there will be new revenue opportunity from non-BlackBerry hardware connected via Mobile Fusion. This is upside that remains to be seen, quite honestly.

CONCLUSION

It's obvious that all analysts want to see more BlackBerry apps. The views are mixed on whether or not the OS is differentiated (I think it is), and the bear camp is very worried about service revenue (reasonable). Most analysts reduced estimates yesterday because of the launch timing of the Q10 and the slight delay in getting the Z10 into the Unites States.

81 comments

mrlahjr

All they've been doing was shaking out the weak hands. Those who sold will be chasing to get back in soon.

Ha ha........First!!!

megajo123

Calling all CrackBerry members! We must go comment on all these and point out lies and stop people from misinforming the public about BlackBerry!

RubberChicken76

Isn't Kulbinder Garcha the guy who proclaimed the PlayBook is far worse than every other tablet out there in every way?

There's a bias

randall2580

From a financial pov is the a tablet in the marketplace that was as financially destructive to its creator as PlayBook was to RIM?

Steelers

Love this guys writes up fair and honest tells it how it is!!!! Great job buddy keep them coming!

Kiddo_24

Thanks for the good summary.

POView

Serial bears feed on the same narrow selective data. most of the bear "analysis" is useless conjecture from a dark gloomy hibernation den.

playbookster

I always enjoy reading Chris' posts. And thanks for linking to my post :)

Telanis

Why didn't you expect the Q10 to be later? BB announced that the first device would be touch-only a long time ago.

Chris Umiastowski

I did expect it later just not two months later 

MoolahMitch

Agreed, the talk was off weeks not months.

rulasiu

Great read, very interesting. Here in Venezuela it seems they are going to launch it (March 12) like the iPhone 5, using a web site slot like machine that randomly selects users, just two tries and if you don't win you just have to wait about a month to try again, crazy Blackberry use here.

SDTRMG

F**k Em! Flip Em the middle finger and move on. I have an iPhone 5 can tell you the Blackberry experience on a full-touch smartphone is what people have been waiting for and is why alot of people moved away from blackberry. BlackBerry 10, the z10, and q10 will bring people back.

vinny jr

My first 2 smart phones were Blackberries. Switched to Android with the Nexus One and stayed hooked to Android, never took to the iphone. I must say I was very impressed over the hardware and most important the new OS. It has tremendous potential. What I am not sure of is the lack of Google Search, is this true, is Bing the main search engine and what about maps and navigation? If that is true that sucks, Google Search is and always will be the leader in the search, maps and navigation fields.
Great success, my girlfriend is buying the new BB and I will get a chance to check it out for a few days.
Vinny

pick1eberry

From what I have seen in comparison videos before BB10 launch you can change the default search engine to Google.

BB Navigator is using TomTom mapping with turn by turn voice. Most everyone that has used it says that the maps aren't as detailed and feature riched as Google Maps (obviously), but it gets the job done...getting you where you want to go.

z_scorpio_z

there is also option of side loading google navigation

Josh Brolin

The market has gone cold on bb because thorstein has not answered how bb plans to replace the huge revenue source which is carrier fees. It failed to bring all the apps to the app store and it promised to wow us. It also opened the door to getting loyal bb users used to a touch screen, which opens the door to these users now being open to trying out other touch screen phones. As for the market gurus, dont take their stories as a personal hatred for bb,they do whatever it takes to make money. They do this with everyone,including apple. The real test will be next quarter report, if bb loss more users that will be a disaster. Also the delayed launch in the usa is a huge mistake,think of how many bb10 sales will be delayed. If you feel bb10 will be a sucess buy now and dont watch the market for a year.

Rootbrian

I think you need to do a bit more research, read blackberry's blog AND crackberry too. Allot has happened.

Edit: BlackBerry is NOT to blame for the March delay. It's the CARRIERS.

george_helgerson

Analysts -- bull or bear -- are stupid.

afwriter

The fact that the company wasn't in a position to release in the US at launch raises more red flags than any other issue facing the Blackberry 10 launch. I'm not saying there aren't good, well thought out reasons -- but when you release a product and don't have it available for sale in the US ... well, it's not good.

Not to mention, the Mobile World Congress will hit before the new phone is out here -- and that's going to put a lot of new products out into the consumer's mind set if they're looking to get a new phone. The key for adoption of any device is to be able to put it in the consumer's hands when they want it. BB10 is new, it's now ... but not available here. And by the time it is -- the time for early adopters may well have passed.

camera531

This point is getting so overlooked by CB. Very frustrating for all of us in the US! They should've had the launch in London or Toronto, and scrapped the superbowl commercial. With a 2 month delay, the commercial will have no traction.

theMonkeysUncle

Absolutely agree. The US delay is the major reason for the drop in the stock price, because investors know that Blackberry had the advantage launching during a lull in major smartphone releases - but they have now lost that advantage, and the $4 million Superbowl ad will basically go to waste. Very bad execution here! As a shareholder, I just have to trust that the rest of Blackberry's major markets will make up the difference. On the plus side, launching in a few more friendly markets will give the platform some chance to build momentum and gain more apps before launching in the US.

MR BBRY

Once again Chris, perfectly broken down. Thank you.

It blows me away to see how analysts and US media are able to manipulate this stock and brand without having a clue what they are talking about. They base their reports on the past performance of BlackBerry or have not even used the new devices. I, unlike so many others who sold, have not been shook by this recent sell off and will wait for the dust to settle until these geniuses realize that these new BB10 devices are the real deal.

It's pretty pathetic that hardly any of these analysts can see past their nose to realize that there is a substantial demand for these devices. All they are able to do is wait for sales and pre-order figures to be released before realizing they were wrong. I can see it already..."This Just In...Breaking News....People are actually buying these phones!" How many of us here have been saying this for so long, we have practically given up? I have resorted to a one line answer for any BB basher.... "Just wait, we will see who was right."

Cesare21

"I expect analysts to be well balanced in presenting arguments, and honest about what they know versus what they don't know. Without naming names, I am rather disgusted by how many analysts seem to turn their reports into BlackBerry Z10 reviews without having spent that much time using the device."

This line says it all. Nuf said.

AustinTX78660

What makes one qualified to be a stock analyst?

Most of these guys have some kind of business background and very little to no understanding of technology and what users want.

How do I know? Because they are constantly wrong. If they were right, they would use all their insight to purchase stocks with their own money and get rich very quickly.

The difference between a palm reader and a stock analysis is the amount of money they get for making random predictions ...

Useless profession in my opinion, as are most jobs in the financial industry.

HabsSuck

with every word an analyst writes or speaks there is a hidden agenda behind it, you have to sift thought it all to really understand what they are trying to accomplish.

RIM needs to show sell through and become profitable. If they do this the share price will be north of $20. $1 billion net income is a $2 EPS x 10-15 you got a $20-$30 stock price

Superfly_FR

Thank you, crisp and clear, as usual.

litig8or98

Thanks Chris. Your's was the post I've been waiting for.

hurds

Nice update.

BB10 is RIMs big push into the Android/Iphone phone market. They own the market for PKB and enterprises who actually value security. 'Mobile Computing' is going to be were they leave the others behind.

mansurbakare

WE CAN PROOVE WALL STREET WRONG THROUGH SALES, BUT AMERICAN PROVIDERS HAVE DECIDED TO DENY US THIS, PLEASE SIGN THIS PETITION SO OUR VOICES CAN BE HEARD....LETS GATHER AS MANY SIGNATURES AS WE CAN......WE NEED TO BE HEARD, WE ARE THE ONES WHO MAKE THIS PROVIDERS, THEY DO NOT MAKE US.......PLS SIGN ====> http://www.ipetitions.com/petition/bring-bb10-to-us-customers-sooner/

Jonathank

Put this on A.C 360 Anderson Cooper... KEEPING THEM HONEST

4ron

Where were the real life examples of BlackBerry 10 during the launch presentation, such as a video showing the guy catching his plane and checking his BlackBerry Hub? Too much stage talk!

canistel

The iphone guys are only going to put up with ios for so long... if they've been on ios from the beginning, that's what, 3 - 5 years of putting up with the most boring, "in and out" experience I can think of. Once they play with a fresh OS like BB 10 (or heck, even windows phone) they will find beauty, easy of use, and a new and fresh take on how things can be done... I'm willing to bet apple and adroid loses more than just a few (same thing for android) people to BB10 unless they update their own outdated and stuffy OS.

musical1806

This is where apps cause a problem. IF you have been using ios for 5yrs you could have spent a small fortune on apps and accessories by now. Having to purchase apps all over again is a big deal. To be honest i havent purchased many apps on either my PB or my 9900 just because of the thought of having to pay for them again and i am BB by choice.

dcgore

I work for a wall street bank, i have to say i share the sentiments most of the street has for the new berries. I've been contemplating if i should get the q10 for myself and i won't. You know why?? Because my company does not support them anymore,,. yes, you read that right.

We have this app that is free for iOS and Android for our corp email account, the bank doesn't have to pay for BES servers and we have to bring our own devices, the company does not provide them to its staff anymore. So if corporate users are the bread and butter of bbry, then i think it's future is not that bright.

My 2 cents.

Ronstermadness

I know the app your talking about and there is one big differance between it and BES....... SECURITY. I HOPE MY MONEY IS NO WERE NEAR YOUR BANK!!!!!!

rickkel

Remind me not to do business with your bank.

The bank I work for (Wells Fargo) still requires BlackBerry phones because of their security safeguards. People here grouse about not being able to use their iPhones (and those who do not have any access to financial information may connect them). I think this is a smart policy.

Wow, you use an app anyone can download for corporate email? Interesting.

z_scorpio_z

BES10 is required for BB10 to be on BES, BUT if your company supports Android/iPhone (likely through imap/active sync) then you can use BB10 phones without BES as well.

Animatrix86

I pulled 50% of my BlackBerry stock out today because I got in a jam and needed some funds. Didn't have what it took to pull everything out though, I still got faith. March can't get here soon enough, but on the flip side maybe I'll have more time to re-invest before the prices go up.

playpen007

I watched CNBC and one analyst said that BlackBerry Z10 is too heavy/thick compare to an Iphone 5. As a matter of fact, they are not much difference regarding weight and thickness. He just say it without any knowledge of the device.

not biased

Cbc yesterday Deliotte senior executive stated hundreds of pre orders from their employees.

Pard

Chris,
I do not always agree with you but I always appreciate your views. The street and their media flunkies are out to bury BBRY. The stock dropped 2 points in 15 minutes at the very second they displayed the phones. All day long they interviewed bearish commentators. To little to late blah blah blah. BBRY has worked hard, they have built a world class team, they have developed a cutting edge mobile computing platform and they are positioning themselves to GROW service revenues by leveraging their technology assets. I have placed my bets despite the odds. The technology business is second to the oil industry and governments are toppled over oil so there is no expectation that these guys are going to play nice. BBRY needs to go private or partner with some heavy weights in my view.

Pard

kgwhat

People need to realize that these analyst don't make unbiased statements for the most part. Pull up a nasdaq level 2 chart and you'll see that many times when these companies downgrade or upgrade $rimm soon to be $bbry plenty to gain. If they want to get in cheap they'll downgrade or bash the stock. Also remember the current short float is at 32% so I suspect some manipulation as some institutions who were short see the long term potential of this stock and beat it down a little more to cover and buy back in to follow the general uptrend in the price (up +100% since bottom in sept). Fact is for $bbry to take off they must execute which means Mr. Boulben has to pull off an amazing SB commercial then follow on Feb 12 or 15 and announce some real good sales numbers ie. 1 000 000+ for example. Then follow that up with an instagram or major app deal announcement and the stock will break through the $18 resistance level we saw last week. The stock is under tremendous scrutiny 225mil trades on launch day another 100mil the day after. Bottom line is EVERYBODY is watching so Execution is the key.

jvictor77

I used to be in banking, and so, I hate financial stuff - and wearing a collar and tie lol! Your article here, Chris, is a necessary and important one for all of us to get perspective though. Great job - as usual! I notice, in the forums, how many buyers are coming off the iPhone. Let's hope that trend continues when it launches in the U.S.!

koool1

Observation based conclusions are dangerous.

I really hope Z10 is selling well but the only number that matters is the real one. 4 million in the first 3 months would be good, more better. We shall see.

winter_frost

Too less Apps, seriously!?.
ok lets do te iOS and android way, lets copy all of them, rename and put them into appworld....
its not all about how many there are, its all about usefulness and quality, right?

Jimcmf

I feel your pain Kevin.

There are a good amount of shares which are shorted. Investors (who pay off analysts - without a doubt whatsoever) need to bring the price of the shares lower ( thus the negative articles and ratings ) so that they can purchase the shares back.

Based on Great sales in the UK (SOLD OUT OF Z10), the stock will be going higher .....and higher ..... and higher ..... and much much higher.

The shorts will be squeezed, and they will chase the stock to new all time high prices. It may take 4 or 5 quarters .... but if the world buys BB10, like the great country of the UK ..... then skies the limit for BlackBerry.

GENERALNATTY

Wall Street is simply tired of delays of getting product to market. They wanna know one thing "When are gonna start making real money?" Blackberry said well maybe in march. Blackberry core users are still kicking around for the best keyboard in the world to make its debut, so when is it coming? Blackberry says well we don't know yet. All of this while rumours are flying about the next iteration of the iPhone and galaxy s models are looming. They can't even give pricing for u.s customers yet. It says to the investor they still after all this time don't have their ducks in a row. It says to the investor I don't have enough information here to be confident and "Be Bold" about my investment. It's says too number crunchers to invest based on faith rather than on math. A lot of folks simply can't do that.

nt300

I understand some will have some negative news regarding BB's stock price, performance and so on, but to give negative views on the Z10 without even touching it or using it, and even going against very tech savvy people that rated the Z10 as Legendary, this just throws there credibility in the garbage, not to mention the miss-information, confusion and lies being thrown out there.

This is the reason why many people including myself, hope BlackBerry 10 not only comes back from the media fabricated death, but I want them to annihilate the competition, so these bias analysts can eat there words for dinner.

Posted w/ BlackBerry Playbook.

tstrike34

Excellent review. BBRY had to go hat in hand to the carriers. I believe Apple and Samsung is exerting pressure on the Carriers via the FCC. This is probably leading to the slowdown of the push to bring the Z10s to the US Market.

Corporate espionage at its best.

That said, BBRY should have planned for this delay in the US Market and had a strategy ready to implement.

Not bueno BBRY. Gotta be nimble in this Market. Apple is there for the taking (Jobs is in the boneyard and Cook is a manager vs a visionary).

kidbagel

Thanks for another very helpful post Chris. I appreciate your deep understanding of the company and the sector, as well as your long-term perspective.

Understanding BBRY/RIM's short-term market movements is as much about game theory as it is about the performance of the company or the quality of its products. Kris Thompson, from National Bank, seems to understand the interplay of these elements better than most analysts out there. Not perfect, but his work makes for a decent read.

AceOfSpade1234

Chris, I'm curious what's the source on that little nugget of information about 50% of all pre-orders are from non-blackberry users? I'd like to read further into that.

Thanks,

- Spades

nabil114

The review reflects the image of the product for the new user.

- Rezaur Rahman

Driftdreams

Without naming names.... I'll do it for you Chris. CNET, Engadget.com, TechnoBuffalo, The Times and the Wall Street Journal. I've on all of these iMedia sites commenting on how bias they are. If the features on BB10 made it to IOS first, they'd all cream their pants like they did for the iPhone5. Not one of them has reported that the z10 is pretty much sold out into the UK already and that the Z10 is on Ebay for as much as 1800.00 right now. It's really sad that BB10 isn't even getting a fair fight in the US. The iSheep media will always make comparisons when they no nothing.

See my review of CNET's review on my twitter @BBMarnel or at http://reviews.cnet.com/blackberry-z10/

jsocan

You forgot to mention the clown from Gizmodo and the biased tech reporters at Bloomberg West.

G-bone

Thanks, Chris. Good balanced look at the state of things.

#BB10Believe

ritesh

Once the apps come to BB10, then they will complain about how costly the apps are on BB compared to others.

philip_daly

In terms of the stock dip at the announcement of Blackberry 10 this can be explained (in part) to the notion: "buy the rumour, sell the news".

Unless Blackberry had a massive surprise up their sleeve for the announcement people were going to sell. Investors would sell if the announcement was underwhelming or if it were as-expected. It turns out that Blackberry leaks like a sieve so there were little surprises (i.e. everything was as-expected). I only count Skype & the name change as the only two things that weren't confirmed before the announcement - but those are not game changers.

The sell-off makes sense to me - and really says nothing much about the product announcement apart from Blackberry didn't have a massive surprise up their sleeve for the world.

lorax1284

"50% of Canadian pre-orders for BB10 came from customers who are not currently BlackBerry users. Unless they're all migrating from feature phones (unlikely for preorders), I think this evidence flies in the face of what the analyst is saying."

This is a hugely important data point. Carriers know what device their subscribers use. Carriers know when a subscriber is on contract or not. If subscribers that are NOT on contract are renewing contracts and switching to a subsidized Z10, that is good from the carrier's perspective. If the subscriber is ON contract and willing to pay full pop for an unsubsidized device, that may give the carrier pause, because they are not getting a contract extension, but they have to notice the appeal of a device that subscribers ON CONTRACT are willing to buy outright. Of course new subscribers who opt for a Z10 and go on a contract with a costly plan will make them pee their collective pants from joy.

The carriers will have the final word on the success of BB10, and their data will objectively determine that "BlackBerry is BACK!" in block upper case or just "meh". Of course, I believe BUC. :-)

jic999

Great article Chris, one question I have is how many of these bear analysts are protecting their brokerages or clients large short positions ?
130M shares are shorted up from 120M. Next week the Short positions will be updated and released and my feeling is these suicide nuts have not covered much ! So on that note they will keep lobbying the Bear analysts !

jic999

I think what BBRY will need to do in the USA is put on a new USA March /April launch to promote the new confirmed APPs and stress that APPs are coming along with Z10 and Q10 phone .
Another Z10 and Q10 demo showing the BB10 Hub , BBM voice , Video chat , the productivity APPs , BB10 Balance, Gestures etc....
Assure the USA users of a demo on how to use Z10 and Q10 is a must. But really focus on the productivity APPs and any new Apps coming to Z10/Q10.
APPs APPs !!

moneyguy1969

Being in the finance biz, I have read the reports of many analysts including Chris for many years. I know Chris's record on RIM and other tech names well. As with every analyst the record is mixed. I do not expect these professionals to be "right" in their call on a stock's movement. All I ask is that they provide a deeper dive into a greater breadth of data than I could possibly acquire myself on a cost effective basis. As such, Chris's reports have been excellent.
Analysts are not "useless". You just need to know how to use them. From the sell side of the street, they are not there to provide the retail investor with "advice". That is the job of the retail advisor, most of whom like the greater investing public, do not know how to fillter analysts opinions and other data. They (we) tend to be parrots.
The analyst's pay cheque tends to be written from the wholesale side of the bank or brokerage house and his audiance is intended to be institutional and sophisticated. That audience is supposed to be bright enough to read a report that rates a stock "hold" and discern that the text actually is saying "sell" or what have you.
Anyway, enough of that.

I am far from being a marketing expert but this is how I read the delayed entry into the USA market for the Z10.
If I were launching a make or break product (let's face it friends this outcome is binary) I would start it first where there is already high penetration and brand loyalty (UK and Canada). Let them beta test it in the wild first because they are likely to better suffer hiccups. Tease the bigger more important and more fickle market (USA) and create the illusion of scarcity. See alleged sales of Z10s on Ebay at retarded prices for example. Then launch a big marketing campaign well in advance of delivery date (Superbowl advert) and deliver it on time and working as advertised to a frenzied consumer.
Of course I may be wrong but I think these Blackberry guys may have finally figured it out. Hopefully they are not too late.

I am neither a fanboy or a detractor. I have owned and continue own Blackberries. I will buy the Z10 and probably a Playbook as well. I also love my ipod mini and have almost been pissed enough at my BB9900 to buy an iphone or a Galaxy III recently. Almost.

Long time listener, first time caller. Be gentle with me.

cbdwolff7

Completely wrong about Blackberry user's coming back. Really never left. Just bought a standby phone until the new BBZ10 product released. What was nice about doing that for me was my being able to see how the other devices stand up against a Blackberry. Im waiting patiently for the USA release. I miss my Blackberry smartphone alot. I didn't want to spend money on a new/old one 6 months ago so tried both formats. Im going to be happier then a bird fead cat to have a Blackberry back in hand. I take 90% of analyst veiws and results and treat them like water under the bridge. The other 10% I pick apart to find the truth and reality in what they write. IMO

brandonwh

Can someone exlpain to my how the phone isn't different enough from the competition? This is the part that boggles me about a lot of reviews.

ekomsone

I am one of those who dumped a lot of my shares after watching the launch. It had nothing to do with the excitement of the launch and everything to do with the release date. If your company is known for pushing release dates and angering consumers, why would a company repeat that process?

"Funny, why do these guys fail to notice that approximately 50% of Canadian pre-orders for BB10 came from customers who are not currently BlackBerry users." Funny, what Chris doesn't realize is, Canada is not a microcosm of the U.S. market, especially when it comes to BB. Canada has a vested interest in keeping BB afloat, a home-field advantage if you will. Americans, aside from loyalists, do not care at all about BB. They care about themselves.

I am a BB loyalist, but their ineptitude at satisfying the American consumer base is legendary. The SuperBowl ad will be forgotten as soon as the "right now" generation realizes they have to wait 6-8 weeks for a phone they may have only have bought on a whim.

Canada has 35m people and the UK has 65m. That is roughly the population of Florida, New York, and California. I guess appeasing smaller consumer base, to the detriment of the largest, is not worrying BB. Well, it worries me. I will wait for my Z10 but there are too many other phones with better specs right around the corner. They really needed to grab a foothold ASAP before people on the fence have too many other options. Who is to blame for the delay is inconsequential. The damage is done. You might not agree with analysts but the people who matter do.

Hopefully BB rebounds because I only dumped half my shares but I have a feeling I should have dumped everything when it hit $18.

randall2580

You took the words right out of my mouth - well written. I discount the uptake in Canada the same way I am not at all shocked that Samsung dominates South Korea. RIM pushed people in Canada away because of the perception (I know its argued here but not in the marketplace)that RIM had fallen behind in their offerings. Now that BlackBerry has a competitive offering they have taken that excuse away and their original motivation "all things being equal lets go for the home team" as you say is back in vogue.

I have the feeling that BB might have not been entirely upset with the USA being out of the initial offering so as to keep the "noise" on the lines in the UK and the switching in Canada which was a reasonable expectation.

Finally in consideration of the sales of the phones you want to compare BB10 to, is a few hundred thousand really that big a number?

Remember BB10 was supposed to "leapfrog" the competition. The reports I have read say this phone leapfrogged previous BB's, but it seems obvious that at best all they did with the new phones was catch up, IMHO

afwriter

Expect the share price to drop further on Monday as analysts will point to the expense of producing a Super Bowl commercial for a product that's not even available for sale in the US market.

I hate to seem like I'm harping a point, but it's a very valid point -- why are you expending marketing resources for a product that is not available for people to buy? It's that line of thinking that has analysts concerned. It doesn't matter how good your product or service is, you're building negative brand equity when you advertise something that people can't actually purchase. Frustration builds resentment, and when people develop a negative perception of a product -- it's much harder to get them back on board later.

jsocan

I have to respectfully disagree. To BB fans and loyalists, the delay is frustrating. However, to others, who happen to be the majority in US, they probably weren't even aware of the launch or even thought BBRY is closing shop given the constant media bashing. The SuperBowl ad will bypass the media and analysts and talk directly to the millions of US consumers that BBRY is alive and reborn. It will help to rebuild brand image and drum up interest and anticipation for the new phones before they finally hit stores.

Charles K

I would have to respectfully disagree with you. IF the super bowl ad grabs anyone's attention in the US and they run to buy the phone, what are the gonna leave with? Not going to be a BB 10 phone that's for certain.They will be like WTF? BlackBerry needs to pull the ad now, before it's too late. All BlackBerry is going to do with this ad is drum up business for other brands and leave its self looking clueless. The rule here in the US is I want it NOW and those who go to buy BB10 will leave with another phone. I think we all know how well the stores here push and sell BlackBerry products.

By the way, how can you be alive and reborn when you don't have a product to sell to the market you are advertising to?

Raestloz

You don't necessarily bring an ad and suddenly everybody rushes to the stores. We don't even know how the ad looks like. Most likely, they'll say something along the line of "this late march" ala hollywood movies.
The ad can be an awareness call that means "hey, there's an awesome phone for you this March, so hold on to your money and don't spend it on other phones!"
Even better, US audience (or pretty much everywhere but UK) will have plenty of user reviews from actual users by the time the device hits US.
That doesn't mean the media won't try its best to bash BlackBerry though.

Nascar1449

I agree with Chris in that by the time the device was released, most followers of the device already knew what to expect. However, what the new BlackBerry device brings to the table is remarkable. I am pleasantly pleased, and at the very earliest will attempt to obtain one. I've never been ashamed of my device, and I'm more PROUD then ever of the new devices. GOOD WORK TEAM BLACKBERRY.

moneyguy1969

Being in the finance biz, I have read the reports of many analysts including Chris for many years. I know Chris's record on RIM and other tech names well. As with every analyst the record is mixed. I do not expect these professionals to be "right" in their call on a stock's movement. All I ask is that they provide a deeper dive into a greater breadth of data than I could possibly acquire myself on a cost effective basis. As such, Chris's reports have been excellent.
Analysts are not "useless". You just need to know how to use them. From the sell side of the street, they are not there to provide the retail investor with "advice". That is the job of the retail advisor, most of whom like the greater investing public, do not know how to fillter analysts opinions and other data. They (we) tend to be parrots.
The analyst's pay cheque tends to be written from the wholesale side of the bank or brokerage house and his audiance is intended to be institutional and sophisticated. That audience is supposed to be bright enough to read a report that rates a stock "hold" and discern that the text actually is saying "sell" or what have you.
Anyway, enough of that.

I am far from being a marketing expert but this is how I read the delayed entry into the USA market for the Z10.
If I were launching a make or break product (let's face it friends this outcome is binary) I would start it first where there is already high penetration and brand loyalty (UK and Canada). Let them beta test it in the wild first because they are likely to better suffer hiccups. Tease the bigger more important and more fickle market (USA) and create the illusion of scarcity. See alleged sales of Z10s on Ebay at retarded prices for example. Then launch a big marketing campaign well in advance of delivery date (Superbowl advert) and deliver it on time and working as advertised to a frenzied consumer.
Of course I may be wrong but I think these Blackberry guys may have finally figured it out. Hopefully they are not too late.

I am neither a fanboy or a detractor. I have owned and continue own Blackberries. I will buy the Z10 and probably a Playbook as well. I also love my ipod mini and have almost been pissed enough at my BB9900 to buy an iphone or a Galaxy III recently. Almost.

Long time listener, first time caller. Be gentle with me.

herrbremerhaven

Options volume is massive at the moment. I would expect share prices all over the place until Z10s actually are available at US carriers. After that point, analysts will focus on the sell through volume. The US market is saturated, so it is tough to see how well initial sales volumes will be. I did see a few other analysts than you mentioned add the idea that the lack of lower priced BB10 devices might hurt Asian market sales. My feeling is that we will know more after a few quarters, though the first hurdle is to beat BB7 sales volume from last year.

Raestloz

I'd think that the first order of business is to dispel the myth that "BlackBerry = low-end specs not worth the effort". For Asian markets, BlackBerry 7 is still enough. After all, most people buy BlackBerry because of the Messenger in Asia

kachisa

Both APPL & GOOG are called "Hedge Fund Hotels" for a reason. Most of wall street has a vested interest to fend off the competition. But, eventually fundamentals will prevail and they will be scrambling to get on board.

jimmychen17

Chris
Would appreciate your thoughts about BlackBerry expanding its market in China. I don't understand why BlackBerry seems to have a lack of interest in pursuing the Chinese market, including the mainland, Hong Kong and Taiwan. 25% of the world population communicates in Chinese. I find it surprising that BB is not putting any solid efforts into this; e.g. lack of Chinese input for the PlayBook. I have not gotten my Z10, but assuming they also won't support Chinese language input.

Raestloz

BlackBerry has had Chinese input support ever since BlackBerry Device Software 5.0. They have no less than 6 different input method. Instead of exaggerating, I think I actually missed a few more.
They have traditional and simplified pinyin input support, and BoPoMoFo input support, and a few others I didn't really care about.

Rootbrian

Great tear down chris, I'm glad that you're seperating the bullshit from the truth. :)