Wall Street Journal digging reveals very weak Q10 demand

Someone who I find does a good job of digging into BlackBerry is Will Connors from the Wall Street Journal. He and colleague Thomas Gryata published a story yesterday highlighting the difficulties BlackBerry is having selling the Q10.

I’ll be the first to admit I was expecting a much stronger launch. With so many older BlackBerry devices on the market I figured there would be millions of people wanting to make the switch. After all, why stick with an older and out-of-date BBOS device when you can upgrade to a Z10 or Q10? And given demand for the Z10 that has been weaker than most anticipated, I was hopeful that a big portion of the remaining BlackBerry customer base must be people who prefer physical keyboards.

But that’s not what happened, or so it appears. According to the WSJ, Q10 sales have been dismal. They spoke to an owner of 16 Wireless stores (a Verizon reseller, by the sounds of it) in the Midwestern US. The owner told the WSJ, “We saw virtually no demand for the Q10 and eventually returned most to our equipment vendor."

Ouch. And the WSJ spoke to a variety of other retailers and carrier executives in the US and Canada. Remember when Thorsten Heins was quoted saying they could sell tens of millions of the Q10? It’s not looking like this was based on reality.

While we hoped otherwise, having had a while to look at the data we’re confident the WSJ report is an accurate representation of reality. During the last CrackBerry podcast, Kevin dove into some of the traffic and activity data with everyone as it related to the BB10 launch event and roll out of the Z10 and Q10. And while he saw the hardcore enthusiasts drive lots of site activity as you'd expect (regular CrackBerry visitors are more engaged than ever in fact - the article commentary and forums are buzzing these days!), there has not been the continued long tail growth of search pop in visits you'd normally expect to see with a device that's selling in volume to the broader, more mainstream audience.

This is the audience that isn't actively looking to talk about their phone in a community like CrackBerry, but is looking for help, apps, accessories, advice, etc. and inevitably land up on CrackBerry. It's actually hard to hit Google, search for anything related to BlackBerry, and not find a CrackBerry result near the top. As Kevin points out, the surge of new visitors related to the Z10 and Q10 launch traffic has now disappeared. Traffic is back to where it was prior to the launch of BlackBerry 10. There's still a BIG audience on CrackBerry, it's just not growing the way you'd expect it to grow if a lot of people were buying and using their BlackBerry 10 phones on a continued basis (conversely, CrackBerry's sister site AndroidCentral.com is seeing this type of long tail growth on the back of the launch of the S4 and HTC One). Looking at the numbers in real terms, you almost get the feeling that the bulk of BlackBerry 10 owners out there to date are CrackBerry people.

You can see the same thing in Google Trends. Here’s a graphic showing search volume in Google for the keyword “BlackBerry”. The peak traffic (indexed to a value of 100) happened just prior to the Z10 launch, and you can barely see any change at all around the time of the Q10 launch.

Obviously this is a problem. The launch of BlackBerry 10 looked like it was on track to actually help the company return to growth. That was then. Today’s it is very clear that something has to change ... and in a big way. As the WSJ points out, this is likely what drove the board to pull together a special committee to investigate strategic options. The status quo, for BlackBerry, is not anywhere close to acceptable.

One thing the WSJ article did not highlight that is worth mentioning in this discussion is the launch of the BlackBerry Bold 9900 as it relates to the timing of the launch of the BlackBerry Q10. The Bold 9900 became available in August 2011. Two years ago right now. With most phone contracts locking in users for two years, it's really only now for many people that they will begin to look at upgrading to their next phone. Likewise, companies that issue phones to their employees typically are not in a rush to upgrade them. We still see a lot of Bold 9900s in use out there, giving hope that we'll start seeing many of these Bold 9900's get upgraded to the Q10 this fall. Will it be 10s of millions of Q10s? Time will tell.

So aside from the discussion of strategic alternatives that we’ve been doing in blog posts, what’s next?  We’ve got cross platform BBM coming any day now. We’ve got the Z30 launch, we've got 10.2 ... but if the Z10 isn’t driving volume it's hard to see how the Z30 changes anything. What else can these guys do? 

What would you like to see BlackBerry do to pull itself out of this decline? 

* With contributions from Kevin Michaluk