Blackberry gains as CEO touts Q10 success
TORONTO — BlackBerry, the Waterloo, Ont.-based smartphone maker, climbed to its highest level in more than a month after CEO Thorsten Heins said he sees sales of its new Q10 device to be in the “tens of millions.”
“We have very, very good first signs already after the launch in the U.K.,” Heins said Monday, referring to the device which features a keyboard. “This is going into the installed base of more than 70 million BlackBerry users, so we have quite some expectations. We expect several tens of million of units,” he said in an interview with Bloomberg Television on Monday.
The shares rose 3.9 per cent to $15.61 US at the close in New York, the highest price since March 21.
The stock has increased 32 per cent this year on optimism that the new BlackBerry 10 lineup can help fuel a comeback.
The smartphone maker is counting on a wave of upgrade buying from BlackBerry users who prefer a physical keyboard to drive Q10 sales and help revive revenue growth. While the touch screen Z10 sold a million units in its first quarter that ended March 2, in line with analyst estimates, the company’s stock has experienced volatility in recent weeks following reports of lacklustre demand for the Z10.
Department store Selfridges and outlets of Carphone Warehouse sold out of the Q10 quickly, Peter Misek, an analyst at Jefferies Group LLC in New York, wrote in a note.
“Salespeople were wellversed on the device and there was more apparent buzz versus the Z10 launch,” Misek said.
BlackBerry said on April 12 it would ask securities regulators to investigate a report from Detwiler Fenton & Co. that its new phones have high return rates, saying that the “false” information may have been released in a deliberate attempt to manipulate its stock price.
“Whatever the motivation is you have to use the right facts, and that’s what we’re challenging right now,” Heins said, referring to the company’s request for both the U.S. Securities and Exchange Commission and the Ontario Securities Commission to review the report.
Data from BlackBerry and one of its U.S. carrier partners Verizon Wireless show that Z10 returns are “completely in line” with the industry and “better than previous BlackBerry launches were, so the quality speaks for itself,” Heins said.
In a separate report last week, Wedge Partners said BlackBerry is probably scaling back Z10 production.
Misek, who has a buy rating on BlackBerry shares, said he saw no sign of Z10 manufacturing cuts and “Z10 sales in Canada, the U.S. and U.K., remain steady with no inventory or return issues.”
The Q10, set to go on sale in the U.S. at the end of May and in Canada on May 1, will sell through the four largest U.S. carriers for about $249 US on a two-year contract. While that’s $50 more than Apple Inc.’s iPhone 5, it’s part of a strategy to target business users willing to pay more for a phone they think will boost their productivity, according to analysts.
The company, formerly known as Research In Motion Ltd., has steadily lost ground over the past three years to Apple and Samsung Electronics Co. Samsung accounted for one-third of smartphone sales last quarter, while Apple had 17 per cent. BlackBerry’s share fell to 3.2 per cent in the fourth quarter then dropped out of the top five in the first quarter of this year.