Company shares fall for fifth straight day
Analysts doubt new phones are enough
Shares of BlackBerry fell for the fifth straight day Thursday as analysts expressed doubts over whether its new smartphones would be enough to keep existing users, let alone capture new customers.
The company’s stock fell 6.8 per cent on the Toronto Stock Exchange to close at $12.92, following a nearly 12-per-cent decline a day earlier when CEO Thorsten Heins gave the world its first official look at the BlackBerry 10 devices.
The stock has dropped 27.4 per cent in the past week after nearly tripling from its $6.18 low in September 2012.
Saying “skeptical investors need more,” RBC Capital Markets analyst Mark Sue questioned whether the new phones would be enough to even keep current users.
He also noted the high-end devices would do little to grow BlackBerry’s user base in the one place it continues to experience success — emerging markets, where about 50 million of its 80 million users are.
“BlackBerry’s base is eroding, so time is of the essence and lowerpriced devices for emerging markets and a larger-screen model must also be in the lineup in order to target a broader audience,” he said. “The older demographics represent BlackBerry’s loyal user base and our study shows that the brand has quite a bit of work to do to attract new users.”
Other analysts said the phone only allows the company formerly known as Research In Motion to catch up with what existing competitors already offer.
“While we were impressed with the features of the new operating system, we believe RIM has only closed the gap with more mature smartphone OS platforms and offered limited differentiating services or features to win back customers from more mature ecosystems,” said T. Michael Walkley, an analyst at Canaccord Genuity.
The new BlackBerry lineup includes the Z10, a touch screen phone that will launch in Canada on Feb. 5, and the Q10, which resembles the company’s more traditional smartphones with a physical keyboard, but won’t be released until April.
“From what we saw, we don’t expect BB10 to win over many existing iOS/Android users while the challenge with Blackberry loyalists will be a learning curve as the operating system and GUI are quite different from the existing OS,” said Phillip Huang, an analyst at UBS Investment Research.
“The devices may appeal to some highly ‘productive’ enterprise users and CIOs, but we believe uptake will be measured,” he added, maintaining his neutral rating and $9.50 price target on BlackBerry.
The BlackBerry 10 operating system has been in the works for years, and is completely revamped from previous versions. The touch screen Z10 will compete against the two most dominant smartphone platforms on the market: the Apple iPhone and a number of devices that use Google’s Android operating system.
Some analysts are optimistic the new BlackBerry phones will see some degree of success. Simona Jankowski, an analyst at Goldman Sachs, continues to rate RIM a buy and has a 12-month price target of $19.
“We continue to see significant upside to estimates over the next three quarters, as BB10 devices drive upside to the Street’s average sales price and margin forecasts,” she said.