At the bottom of a Barron's article was some interesting information about BlackBerry's (NASDAQ:BBRY) market share in Canada. Raymond James analyst Tavis McCourt mentioned that BlackBerry's Canadian market share went up from 6% in Q4 2012 (Calendar Year) to 13.5% in Q1 2013. That is very strong growth for BlackBerry in Canada, but still doesn't tell the entire picture about the Z10's success in Canada. The Z10 was only available for 61% of the quarter, so BlackBerry's market share during this time would be higher than 13.5%. We are going to calculate this market share below.
Z10 Market Share In Canada
The Z10 was launched in Canada on February 5. This means that there were 35 days in Q1 before the launch, and 55 days from the launch day until the end of the calendar quarter. If we assume that BlackBerry's market share declined from 6% to 5% pre-launch as people waited for the new phones, then BlackBerry's post-launch market share from February 5 to March 31 would be 18.9%. This averages out to 13.5% over the quarter if you assume that each day is equally weighted. The 18.9% market share is a 215% increase over BlackBerry's market share in Q4 2012.
# of Days
% of Period
BlackBerry Market Share
If we assume that the sales of BB7 phones in Canada declined further due to the Z10 being available, it seems reasonable to peg Z10 market share at 15% during the post launch period, with BB7 phones representing the other 3.9%.
BlackBerry 10 Share Trends
There have been suggestions that BlackBerry 10 sales have benefited from a lot of pent-up demand at launch, and that demand has fallen greatly since launch. While we don't have sales data by month, we can estimate sales by looking at Google Trends for Canada for the search terms Z10 and Q10 (for May). I've also made some slight adjustments for Q10 numbers to remove people searching for coenzyme Q10.
The Google Trends information tells us that the search term Z10 averaged 51.92 points for February, 34.13 for March, and 27.91 for April. Doing some calculations based on a February 5 to March 31 Z10 market share of 15% allows us to split this out as 18.6% market share in February (from the 5th onward), and a 12.2% share in March. In April, estimated Z10 market share was 10%, and during the 1st half of May, combined search volumes for Q10 and Z10 would indicate an estimated market share of 20.2%. Search volumes for the Z10 had stabilized from around the second week of April onwards, indicating a floor of around 9-10% prior to any cannibalization from the Q10.
February (5th onward)
May (1st Half)
Google Trend Points Per Day
Estimated Market Share (BB10)
It is likely that there are many people searching for both Q10 and Z10 and then deciding to buy only one phone, but it seems reasonable to peg combined BB10 sales at least at 15% market share over a longer period. Another factor to consider is that the Q10 likely appeals more to business users, and there may be a higher ratio of unit sales to search volume for the Q10 due to bulk business purchases.
What Does A 15% Market Share For BB10 Mean?
Smartphone sales in Canada are approximately 1 million per month, with increased sales during the holiday season pushing total sales to around 14 million per year. A 15% market share would therefore translate into 150,000 units per month (450,000 per quarter) at this time of year, or 2.1 million per year if that share holds up through the holiday season.
This number matches up pretty well with a survey done in February by Forum Research, which concluded that BlackBerry could sell as many as 2.6 million BB10 devices per year in Canada.
Taking the 15% and combining it with a legacy BB7 market share of 3% would make BlackBerry's overall market share in Canada 18%. This is a 200% increase over BlackBerry's market share in Q4 2012.
An 18% market share also results in 2.52 million BlackBerry units being sold per year. This is a 21% increase over 2011, when they shipped 2.08 million units to Canada.
Evidence shows that BlackBerry has made a strong comeback in Canada, increasing sales to levels higher than they were in 2011. Although Canada is only a medium-sized market, this level of sales will bring revenues from Canada to above $1 billion per year. Combined with a similarly high market share in places such as the Middle East, BlackBerry has established a very solid base with their high-end BB10 devices and are now poised to make waves with their Q5 device targeted at emerging markets and mid-range consumers.