Shortly after the Z10’s launch in Canada and the UK, we heard some very exciting news from BlackBerry — they claimed this was the best product launch they have ever had in each country. However, it seems that financial analysts aren’t quite so confident in these statements, with many of them lowering their sales expectations from pre-launch estimates. Sound worrying? I wouldn’t jump to conclusions just yet.
Big names in financial analysis, such as Pacific Crest and Cannacord Genuity, recently cut down their estimates to some eyebrow-raising low numbers – the latter believes that we won’t see more than 300,000 Z10’s shifted by the end of the fiscal year on March 2nd. Pacific Crest was a bit more generous, saying we could see between 1 to 1.5 million units shifted by then. Previously, Cannacord believed we would see almost two million devices sold by then, while Pacific Crest was betting on three to four million units. Keep in mind that these estimates are not based on the number of devices sold to actual end-users, but rather the number of devices delivered to carriers.
So, what’s going on here? What has convinced these analysts to slash their estimates so drastically? As odd as it may seem, the revised estimates appear to be based on anecdotal evidence. In other words, analysts are making phone calls to retail stores to ask how the Z10 is selling. Their inquiries seem to suggest that the Z10 is not commonly out-of-stock, contrary to what CEO Thorsten Heins has said in recent interviews. But it doesn’t take a financial analyst to see the problem with anecdotal evidence — in my own experience, I’ve seen extremely strong interest and sales alike for the Z10. I’ve heard of numerous stores running out of stock, and customers being unable to find a Z10 in-stock anywhere. Does this have to mean anything? Not at all. However, this clearly goes against what the analysts have been hearing.
There are simply far too many factors involved to rely on such evidence as a reliable method of predicting sales. How much traffic do these stores get? Where are they located? What carriers do the stores belong to? All of these considerations could sway the sales of the Z10 against the tide in that specific area. Take another anecdotal example of mine — I know a lot more iPhone users than Android users, but a glance at global smartphone sales will reveal that Android is outselling the iPhone by an absolutely massive margin. This obviously doesn’t mean the sales figures are wrong, but in the particular area that I live in, the iPhone may well be more popular. It’s possible that the analysts found themselves in a similar situation.
There’s another potential problem with analyst figures as well. Although we can only speculate whether or not this is the case with the analysts in question, quite a few folks out there have a vested interest in the decline of BlackBerry stock — they are short selling it. If you’re not financially-savvy, to make a long story short, this means that they only profit if the price of the stock falls. And if that’s the case, they certainly wouldn’t want it to be known that the Z10 is selling well — that could drive stock prices up. So, those who are shorting the stock could try to gather the most negative evidence possible for their estimates in an effort to lower stock prices. Even if I can’t speak for these particular analysts, the industry of financial analysis has certainly seen such practices occur in the past.
At the end of the day, however, this is all one big guessing game. Neither the analysts, nor I, have any access to real sales numbers. BlackBerry is going to keep those figures a closely-guarded secret right up to their next earnings call. Until then, no amount of anecdotal evidence or biased reports are going to tell us just how well the Z10 has really been doing. So, let’s not panic just yet. Let BlackBerry do their thing, and we might just be surprised by the results — for better or for worse.