Research in Motion (RIMM) probably sold about 100,000 to 150,000 BlackBerry Torch devices, a sum that’s solid but a bit underwhelming compared to an Apple iPhone or latest Droid launch.
Wall Street analysts in recent days have been handicapping Torch sales. The verdict: Torch sales were solid but underwhelming overall. The Torch is the device that’s supposed to give RIM a kickstart, put the BlackBerry franchise in better position, and protect the smartphone maker’s market share. In other words, the Torch launch was ok, but not good enough.
Wedbush analyst Scott Sutherland on Tuesday downgraded shares of RIM to neutral from outperform. Sutherland said:
We continue to believe that RIM’s strategic positioning in the enterprise, alignment with carriers, new products, and international expansion will allow the company to participate in the solid growth of the smartphone market. However, while the Torch launch was decent, we do not see it slowing the oncoming rush of Apple and Google long term, and see risks to its enterprise positioning.
Here’s a roundup of what analyst are projecting:
Stifel Nicolaus analyst Sanjiv Wadhwani:
Combined with sales at Wal Mart, Radio Shack and Best Buy, we estimate opening weekend units sales were between 100K-150K devices. With the launch taking place in the first half of August, this quarter (August-ending) guidance of 11.6-12.1 million devices, ASPs of $300 or higher and revenues of $4.4-$4.6 billion could ultimately prove conservative (offset somewhat by issues in the Middle East). However, the device will ultimately have to sell in the market place side-by-side with Apple’s iPhone. To sustain U.S. sell-through momentum into the November quarter, we believe the price of $199 on contract will have to fall, and large enterprise customers may gain some leverage with respect to pricing.
Based on our initial and follow up checks at several AT&T stores, resellers, call centers, and industry contacts, we believe there was a reasonably good reception for Torch though found it modest in comparison to recent iPhone, Droid, and EVO launches. We estimate over the first few days, Torch was selling at the rate of 1-2 units/hour at AT&T stores, and somewhat slower at other resellers. Applying a rate of 1 unit/hour for AT&T owned stores and 2 units/day at partner retailers, and assuming contribution from online and call center sales, we estimate ~750K Torch units sell-through in FQ2, which gives us comfort with our 11.7 million unit estimate for FQ2 ending August 2010.
William Blair analyst Anil Doradla:
One key point that we consistently heard from the stores was that the initial response to the Torch was nowhere close to the launch of the iPhone 4. Although the Blackberry 6.0 is a marked improvement over BlackBerry’s current user interface, we believe the device and new OS will be viewed as another “me too” product in the crowded space of Smartphone operating systems. Similar to the launch of the Blackberry Bold last year, we expect the OS to provide a boost to RIM’s replacement rate, particularly from business customers, but we do not expect significant share gains at AT&T, much less the broader North American market.
The big point: RIM’s Torch sales are roughly in line with the Bold, but the real key for the smartphone maker will be word-of-mouth and sustained sales—with or without price cuts. On this front, it’s possible that RIM could benefit from word-of-mouth.
Although RIM failed to generate any Apple-ish buzz with the launch of the Torch, folks that have played with the device say it’s not as bad as portrayed. In fact, expectations seem to be low enough for the Torch that many users will be pleasantly surprised.
TechRepublic’s Jason Hiner has played with the Torch and reckoned that the device is enough to keep BlackBerry users in the fold. Frankly, RIM only has to keep its existing users happy and it’ll be OK. RIM’s challenge is to prevent defections to the iPhone and Android devices. Hiner wrote:
If I had gotten the BlackBerry Torch 9800 in my hands 12 months ago, I would have been dazzled by it. In fact, I probably would have made it my primary business device.
However, that was before Android 2.0. It was before iOS 4. It was before the iPhone 4 and its impressive screen. It was before the Nexus One and the HTC EVO and the Samsung Galaxy S all raised the bar on Android devices. A lot has happened in the smartphone market in the past year.
Today, the Torch is pretty great, for a BlackBerry. It can rightly be called the best BlackBerry yet, but its best still doesn’t quite measure up to iPhone or Android devices, especially in the critical areas of Web browsing and third party apps. The Torch is the best messaging (email, texting, and IM) device on the market. And, it’s the best business smartphone for those companies that are still tied to BES for security and IT reasons.
So, in that sense, the BlackBerry Torch 9800 and the BlackBerry 6 OS should offer enough of a step forward to keep a lot of BlackBerry fans loyal to the platform.
In the end, RIM may not need a lot of razzle-dazzle with the Torch — so these opening weekend tallies may not matter that much. RIM only has to keep BlackBerry customers in the fold.