Hit or miss, BlackBerry is buying time with Q10

BlackBerry Q10 Sales

We have seen mixed reports regarding BlackBerry’s performance with the BlackBerry Q10, its first QWERTY toting BlackBerry 10 smartphone. Most industry watchers seems to think early Q10 sales have been strong, though a few analysts have strayed from the pack. RBC Capital Markets’ Mark Sue is in the first camp, though he noted in a new research note on Monday Q10 sales might not blow us away. Regardless, however, the analyst says BlackBerry has already succeeded in one respect: The Q10 is buying BlackBerry some time to turn things around.

“BlackBerry is filling depleted channels, with the company on pace to meet our May-qtr estimates,” Sue wrote in a note to clients sent Monday. “Competition remains fierce and Samsung’s GS4 is emerging as the flagship push by carriers, though Q10 seems to be settling into a niche for professionals. Expect message of positive turnaround at this week’s user conference.”

The analyst says Q10 sell-through in the U.K. is still “healthy,” though momentum has slowed following a big launch. Sue noted that less than 5% of the stores he contacted in the U.K. and Canada were sold out of the Q10, but whether or not the phone winds up being a huge success, BlackBerry has already bought itself some much-needed time.

“BB10 channel fill and expected enterprise uptake give BlackBerry time to re-build its business and develop new enterprise and consumer services to offset the shift away from its mandatory services model,” Sue wrote. “Improving margins, increasing retained earnings and strengthening the balance sheet may enable BlackBerry to carve a niche in the expanding smartphone market.”

Sue reiterated his Sector Perform rating on BlackBerry shares with an $18 price target.

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