Research in Motion (BB/BBRY): some thoughts post Barcelona meetings - sounds like demand for the new Z10 is very strong but supply is a problem. BB could easily have sold 2M units in the markets where it has launched but supply is an issue. The 300,000 number that one analyst put out there is far too low but its going to be hard to say where the number falls exactly. Really depends what happens this week given this is the last week of the quarter but we are likely looking at ~1mm Z10s shipped. And again that is largely the UK, Canada and a bit in the Middle East. Nothing in the U.S. or other big markets like LATAM, Africa or Asia.
Pricing on the device is "above" $550 and gross margin is "higher" than 30%
US carrier certification is taking longer partially due to the number of vendors in the networks - old Nortel, old Motorola, Alcatel-Lucent, Ericsson, Nokia Siemens.in Europe its basically Ericsson and Nokia Siemens.
~1/3 of Z10 devices sold were to iOS and Android users - based on data collected from Phones 4U, a phone retailer in the UK - the biggest switch was from the iPhone 4 and 4S. Phones 4U said the iPhone 5 was not a big enough change to make most iPhone users upgrade
Weekly sales meetings are turning into product allocation meetings - ramping volumes but its happening slower than what most sales people would like to see. The lack of units is causing tensions with some customers. Trying to guage the quarter at this stage is difficult. Device volumes should be roughly flat to last quarter at about 6.8M but with ASPs and margins edging higher thanks to the Z10. Again, its a supply issue at this stage. This is the last week of the quarter and the co is trying to get as many units shipped as possible.
Big advertising campaign will begin after the US launch still expected in March
Q10 launch appears on schedule and there is strong pent up demand for the product but BlackBerry is focused in getting the carriers behind the Z10
I can't blame Blackberry for being conservative after their mis-execution on the Playbook two years ago.
Here is where strategic partnership with large scale manufacturing comes in handy...
2 Mil phones would not translate into any earnings for rimm. Might make them $400Million Dollars in profit which would pay for the advertising and continuing business costs. Instead it reduces close to 1M people who would pay subscriber fees!! The more they sell the worse the stock gets, how do you like that!?
Truth is hard to understand for most people.
Its great that some of these analysts lowered sales figures to just 300,000 ...looks like it could be an easy beat for BBRY to me. with close to 1 MIL sales we could easily be in the 20"sssssssssssss
Sentiment: Strong Buy
I think just the basic numbers from the sales will put us in the 20''s... the short squeeze could push this over 30 quickly.... assuming that they haven't covered, there is at least 24% short, and that is a HUGE percentage on a stock... they are so screwed...