The Street today continued to discuss the announcement yesterday by BlackBerry (BBRY) that it had received an order for 1 million units of phones based on its new BB10 operating system, the largest single order in the company’s history for any device.
Analyst Maynard Um of Wells Fargo yesterday wrote that the announcement was encouraging, as did Goldman Sachs‘s Simona Jankowski this morning.
Then, it was the bears’ turn. Sterne Agee‘s Shaw Wu this afternoon reiterates a Neutral rating on BlackBerry shares, writing that the 1 million figure is “impressive,” and also “consistent with our recent supplier checks indicating BBRY likely shipped 1 million to 1.5 million units.”
“The order size would suggest a service provider or distributor customer and we believe expectations that it is a U.S. carrier make sense,” adds Wu. “But from our analysis, we believe Indonesia, arguably BBRY’s strongest country, may make more sense.”
Nevertheless, Wu is still concerned a rebound in sales over a longer time frame is not certain:
While near-term BB10 momentum looks good, we are concerned with sustainability. Our feedback indicates buyers are long-time loyalists as opposed to new customers. It remains to be seen if BB10 can gain mainstream acceptance that BB once commanded that is now owned by Android and iOS. In addition, we are concerned with the company’s road to profitability given rising BOM (build-of-materials) costs with the use of more premium parts including touchscreens, glass, and metals and as its higher-margin service revenue (36% of revenue) will likely get impacted as BB10 ramps as a larger contributor. The reason is lower service fees vs. previous generations.
And Brian Blair of Wedge Partners this afternoon wrote that of the announcement yesterday that “we don’t think it means exactly what the headline suggests”:
We believe this million unit order is from a distributor, not a major carrier like AT&T (T) or Verizon (VZ), as many immediately speculated. We don’t