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TORONTO – BlackBerry’s Z10 smartphone has attracted record orders at Canadian wireless carrier BCE Inc. and analysts say sales are off to a strong start in the U.K., sparking a 22 per cent stock rally over the past two days.
BCE, owner of Bell Mobility, Canada’s No. 2 carrier, said early orders for the Z10 have topped any previous BlackBerry model, while one Carphone Warehouse Group Plc outlet in the U.K., where the phone has been on sale since Jan. 31, sold out of the model in under half an hour, local staff said.
BlackBerry is counting on a robust start before the Z10 goes on sale in the U.S. in March to help reverse six quarters of declining sales and years of market-share losses to rivals led by iPhone maker Apple Inc.
“Even if the long-term prospects for the platform are very uncertain, we believe all is in place for BlackBerry 10 to enjoy a great debut,” said Pierre Ferragu, an analyst at Sanford C. Bernstein in London.
Ferragu raised his rating on BlackBerry to the equivalent of a buy yesterday after getting preliminary sales information from his contacts in the industry.
“Initial feedback we have received from distributors on the first days of sales is particularly positive,” he said.
BCE’s Bell Mobility site has been taking Z10 pre-registration since the beginning of January and the device topped all BlackBerry orders even before the Jan. 30 unveiling, Bell spokesperson Mark Langton said.
Rogers Communications, the country’s largest wireless carrier, said it has received “thousands” of orders for the touch-screen Z10.
“We’ve had the reservation system up and running and we’ve seen some pretty good success on that,” Rogers CEO Nadir Mohamed told reporters Tuesday at an event at the company’s flagship Toronto store.
Rogers, BCE and Telus, which said its early customer response to the Z10 has been “very positive,” begin selling the phone in stores across Canada on Tuesday.
The Q10, a model with a physical keyboard that is likely to appeal to BlackBerry’s traditional user base, will go on sale “around the April-May time frame,” Heins told reporters.
The Z10 won’t go on sale in the U.S. until March because of lengthier testing by AT&T Inc. and Verizon Wireless, Heins said, reiterating previous remarks. “We were trying to get there, but, you know, unfortunately sometimes it just doesn’t work out this way,” he said. “We’re just going to get going in the U.S. as soon as we can.”
In the meantime, Canadian sales should help generate buzz before the U.S. debut, Heins said. “Canada will set the stage,” he said. “Canada will be raving about BlackBerry Z10 and consequently will influence the U.S. market.”
BlackBerry shares climbed 5.9 percent to $15.86 at 9:40 a.m. in New York after jumping 15 per cent yesterday, the most since April 2009. The stock tumbled 17 per cent in the two days after the phones’ unveiling last week amid concerns the delay in hitting the U.S. market will hurt BlackBerry’s recovery.
Canadian support for the Waterloo -based company, known until last week as Research In Motion, helped shore up BlackBerry sales for a few years after the debut of the iPhone in 2007. However, by the end of 2011, Apple had toppled BlackBerry from the top spot in Canada.
About 230,000 BlackBerrys were shipped in the third quarter, or seven per cent of total phone volume in Canada during the period, according to IDC data. The iPhone accounted for 31 per cent of Canadian sales in the period.
In 2010, BlackBerry set out to build a new operating system after sales growth of its aging smartphone began to slow. While delays of more than a year tested investors’ patience, the BlackBerry 10 software has won good reviews for its keyboard innovations and ability to run multiple applications at once.
That has gotten U.K. sales off to a “strong start,” said Peter Misek, an analyst at Jefferies & Co. in New York. He rates BlackBerry a buy. Carphone Warehouse is seeing widespread sellouts, while carriers O2, Vodafone, Orange and EE are seeing robust demand, Misek said, citing that checks he and his colleagues have made.
“Initial sales bode well for the broader launch in March,” Misek said.
Sales staff at a Carphone Warehouse store in London who spoke to Bloomberg said they sold out of the Z10 within 20 minutes. They declined to give their names as they were not representatives for the company, Europe’s largest mobile-phone retailer.
Four analysts have downgraded the stock since the phones were unveiled, including GMP Securities’ Deepak Kaushal, who cut his rating to reduce, the equivalent of a sell. While praising the hardware and software, Kaushal said, “We see little at this point that will attract subscribers back from competing smartphones.”
Analysts cited the $199 US price for the Z10 as potentially too high to compete with Samsung smartphones, as well as the fact the Z10 wouldn’t arrive in the U.S. for another month.
Those are negatives that investors shouldn’t dwell on, Ferragu said.
“The strength of this launch is overlooked by investors, creating strong opportunity to buy BlackBerry,” he said.