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BlackBerry 10 debuts on Wednesday – strap in for a wild ride

Zach Epstein
January 28th, 2013 at 11:00 AM
BlackBerry 10 Launch Analysis

Research In Motion (RIMM) is set to unveil its next-generation BlackBerry 10 platform on Wednesday along with its first two next-generation smartphones, the BlackBerry Z10 and the BlackBerry X10. We’re not really expecting any major surprises at the event considering how thoroughly RIM’s new platform and devices have leaked, but just because we know what’s coming doesn’t make the response any more predictable. RBC Capital Markets analyst Mark Sue recommends that investors “keep hands and feet inside the vehicle at all times” as the world straps in for what will undoubtedly be a wild ride.

“A lot of information on RIM’s new BB10 devices has already been leaked so we expect the stock to settle back down post Wednesday’s launch,” Sue wrote in a note to clients on Monday morning. “It’s an ultra competitive market and most consumers have made up their minds on BlackBerry, so we believe RIM really needs to wow the audience. Variability of future unit growth depends on RIM’s pace of future launches and innovation beyond the first two devices.”

He continued, “Our study shows major new devices typically see a pop of interest and then a fade at which point successful devices can pull ahead while those devices not sufficiently promoted can wither on the vine. Palm Pre, Nokia’s (NOK) original Lumia 900 and RIM’s Storm were hopeful devices which subsequently fizzled. In comparison, Apple’s iPhone and Samsung’s Galaxy became major franchise devices.”

The analyst believes Wednesday’s press conference is more about RIM’s “leap from legacy BlackBerry to a modern platform” than it is about the devices themselves, since they have both already leaked extensively. He is also looking for favorable release timing for the Blackberry X10 because “BlackBerry loyalists are keyboard centric, so RIM must not delay its QWERTY version.”

In the end, Sue believes consumers seem “ready for something new” and BlackBerry 10 might be that “something.” Still, the analyst’s sales forecast likely won’t blow investors away.

“Our forecast calls for RIM to ship 500k BB10 units in the Feb-quarter and 10M in CY13,” Sue wrote. “Timing is working to RIM’s favor and our study shows that mobile Operating Systems typically peak after five years. Our global Smartphone analysis details that the “other” category may show the fastest rate of unit growth this year. Profits are another story and lower scale typically means lower margins.”

RBC reiterated its Sector Perform rating on RIM shares with a $19 price target. BGR will be covering RIM’s press conference live on Wednesday, so be sure to tune in for all the news as it breaks.[bgr-post-bug]

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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