Analysts lower sales projections for BlackBerry Z10
A number of analysts have lowered their sales forecasts for the BlackBerry Z10 touchscreen smartphone based on delays in launching the smart phone in large markets like the United States.
Michael Walkley, an analyst with Canaccord Genuity, lowered his Z10 sales forecast for the first quarter from 1.75 million to 300,000 units, according to a report by Investor's Business Daily.
Walkley said that there has not been strong support for the phone from U.S. carriers. "We anticipate carriers will not build large inventory levels" for the new BlackBerry devices, he wrote.
As a result of Walkley's analysis, Canaccord Genuity reiterated its sell rating on BlackBerry's (NASDAQ: BBRY) stock with a price target of $9. BlackBerry's shares closed at $13.88 on Thursday.
BlackBerry launched the all-touchscreen Z10 and the Q10, with the traditional physical keyboard, based on its new BB10 operating system, with much fanfare at the end of January, even changing the company name to reflect the focus on the BlackBerry brand.
Brian Blair, a principal at Wedge Partners, was also pessimistic about the Z10's prospects. "We are getting indications that U.S. carriers are not optimistic about Z10 sell-through, but are instead more hopeful about the keyboard-based Q10. [Android and iOS] are simply too entrenched in the U.S. market," he wrote, according to the report.
James Faucette, an analyst with Pacific Crest, noted that Z10 sales will fall well short of Wall Street's expectations of one million units shipped in the first quarter, according to a report by Forbes. Instead, Faucette expects shipments to total between 275,000 and 325,000 units in the first quarter.
"We believe the Street has gotten ahead of the potential reality for BB10 shipments. There is no line of sight to profitability; we remain sellers of BBRY," he advised clients.
At least one analyst is not so gloomy. Peter Misek of Jefferies and Company said that initial Z10 sales have not been as bad as many had feared, according to a report by StreetInsider. Misek said that the Z10 launch in France and the Middle East have gone well, and added that it has seen strong U.K. sales. Jeffries maintains a buy rating and a price target of $19.50 on BlackBerry's stock.
BlackBerry is competing with Microsoft (NASDAQ: MSFT), which launched its Windows Phone 8 last fall, for the third spot in the enterprise market behind iOS and Android. But Microsoft has a huge marketing budget and a dominant position in the PC OS market. BlackBerry's road is a long and arduous one.