We are in a quiet zone for those who follow BlackBerry (NASDAQ:BBRY). All the major markets have released the Z10 and we are awaiting the Q10 physical keyboard device. We have had some financial results from the last quarter and even though it was a short window, it appeared promising. BlackBerry has been very tight lipped about sales in geographical regions and this information is hard to come by.
Customer sentiment and the supply channels are a good indicator for sales, and how customers are accepting the new BB10 platform.
Carphone Warehouse is the largest seller of mobile devices in the UK. The CEO of BlackBerry Thorsten Heins has stated during the earnings call last week that all the supply channels are being emptied to 100%. Our inventory checks have led us to the Carphone warehouse to gauge the accuracy of this statement.
With close to 800 retail outlets, we checked 85 stores for product. This was done online with the Carphone Warehouse inventory tool as physical checks to that level would be overly time consuming.
44 out of 85 stores - sold out (52%)
41 out of 85 stores - stock available (48%)
This data illustrates one of two things: either there is a supply problem or there is overwhelming demand. I feel it is a combination of the two as the supply chain is being exhausted with fair to steady demand.
Reviews / day
Data from Carphone Warehouse
It appears from the customer reviews in the UK that the Z10 is being accepted as a quality device. The number of reviews are included in an effort to quantify the possible sales. It should be noted that the early adopters of the Z10 would be more likely to write reviews and the data may be skewed upwards. The other popular mobile phones are included for comparison purposes.
Three carriers have rolled out the new Z10 and while it has only been available a couple of weeks, there are a significant amount of reviews. The reviews from other retailers such as Best Buy (NYSE:BBY) have not been included.
Also of note are the different receptions that Verizon and ATT provided for the Z10. ATT was criticized for not providing any support, training or product placement in their stores. Verizon on the other hand was cited as providing a supportive infrastructure. Peter Misek from Jefferies LLC released a statement:
"Very apparent Z10 store promotions and training for service reps. We believe Verizon is marketing and promoting the Z10 in a significant way. Every store representative was enthusiastic about highlighting the in-store display and suggesting a demo. Additionally, we found the representatives to be very well informed about the features of the device and consistently viewed it as a competitive device aside from the available apps."
The table below illustrates that the Z10 is getting a positive response in terms of device quality. The five star rating system shows the Z10 as coming out on top, and this was in spite of the battery component of the Z10 getting low ratings. (4.0 to 4.4)
The referral rate was based on a question from the carriers if they would refer the product to a friend. Again the Z10 had high ratings relative to other phones.
The number of reviews per day are indicative of strong sales. They do not lend themselves to outstanding sales in the same category as the iPhone by Apple (NASDAQ:AAPL) and the Samsung (OTC:SSNLF) Galaxy SIII, but are still substantial. Also the reviews are only posted from users that sign in, and the first comment in the review section was only after the carrier released their product for sale.
Reviews / day
Data from Verizon, ATT and T-mobiles websites
Rating / 5
Weighted averages from table all carriers
Our checks through ATT showed that only 1 in every 25 stores were sold out. Jefferies LLC released a statement with their own store checks:
"Verizon's sell-through rates in line with AT&T. Based on our store checks, we believe Verizon retail stores and authorized resellers may have sold ~200K units since launching, averaging ~10 units point of sale. Our checks indicate that every store and reseller had the phone in stock and sell-through appears to be steady. Representatives highlighted particularly strong sales to the niche group of loyal BlackBerry users. While Z10 sales cannot compare to iPhone or Galaxy sales, we believe the Z10 is currently one of the top five best-selling handsets on both Verizon and AT&T."
"Prior AT&T checks from 3/22/13. Our checks indicate that initial sell-in appears to be generally 10+ per store. Most cited sales as okay with a few slower and a handful stronger. Some stores were out of stock but expected replenishment shipments this week. Our checks also indicate that AT&T Business is seeing significant interest and could account for a meaningful portion of demand. We note that even if BBRY only has a niche 5% of the U.S. smartphone market with BB10, that represents a substantial rebound from its current <2% share."
Other sales related information
- Vodafone in Germany has announced the Q10
- Carphone Warehouse has the Q10 release date in May
- Telefonica has received a 257 credit line to purchase BlackBerry products (see article)
- BBM music service is cancelled - This is a positive because Thorsten Heins has previously stated that he has no problems canceling services and products that are not profitable
- Potential increased sales in the US Armed Services (see article)
I am happy with the information that is being received about the new Z10 and while it will take some time, the end result should be favorable. With the financials stated in my previous article, BlackBerry is on the right path.
I would like to thank all the people who have emailed me information over the past two weeks, including Yosemite Wealth whom provided valuable and timely info.
Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.