More preliminary evidence that the new BlackBerry Z10 is off to a better start than some had foreseen: A pair of research notes lending further credence to early reports of strong demand for BlackBerry’s first BlackBerry 10 handset.
Bernstein analyst Pierre Ferragu and Barclays’ Jeff Kvaal on Monday shared details of their own Z10 retail checks, and they largely corroborate the findings of an earlier survey by Jefferies & Co. Ferragu pointed to early enthusiasm for the devices in the U.K. as he raised his target price on BlackBerry shares to $22 from $12. “We have grown more confident in the likely success of the BlackBerry 10 launch, supported by low channel inventories, strong operator support and material pent-up demand,” he said. “Initial feedback we have received from distributors on the first days of sales is particularly positive.”
Over at Barclays, Kvaal reported similar results from his own channel checks. He surveyed a number of BlackBerry vendors in the U.K. over the weekend and heard that BlackBerry Z10 sales were strong. Some store locations reported sell-outs, while others said they had only limited stock remaining. “Our recent store checks suggest that initial sales of the BlackBerry Z10 are off to a solid, if not healthy start in the U.K.,” he said. “We believe this is a function of strong sell-through versus limited sell-in. … We believe BlackBerry’s Z10 is off to a better start than the Lumia 920. The solid initial demand is a positive step in our view, despite the number of challenges that remain.”
Off to a better start than the Lumia 920.
Now that is encouraging!
Assuming, of course, that these sell-outs are exclusively a case of strong demand and not one of average demand aided and abetted by modest supply. Remember, it was the Lumia 920 and its brethren that lifted Nokia’s overall smartphone shipments for the first time in a year, when the company last reported earnings.
So, assuming these initial Z10 stock-outs are caused by overwhelming demand and not limited device supply, the company formerly known as Research in Motion’s comeback may not be as far-fetched as it once sounded. That said, it’s important to remember that these retail checks are both preliminary and anecdotal. They’re just indicators, not hardcore evidence of a true recovery. Strong early demand doesn’t always translate into solid sustainable demand. More to the point, the U.K. is one of BlackBerry’s largest markets, with a very loyal user base. Heavy buzz there doesn’t guarantee heavy buzz everywhere.
So is there reason for optimism? There would appear to be, yes — but a cautious optimism. BlackBerry may now have a device and operating system that are resonating with consumers, but it’s coming from behind in a race in which it has already been lapped many times by more than one rival. And it continues to face a number of daunting headwinds. The coming year isn’t going to be an easy one, by any means.
