BBRY or “Blackberry” (formerly Research In Motion Ltd) is performing well in its UK debut of the Z10 according to Peter Misek, CFA, CPA an analyst at Jefferies. In the research note released on March 7th 2013 Peter notes that the firm has physically checked six stores in London and Edinburgh on his recent marketing trip for signs of excess inventory or wavering Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s Z10 demand. He found neither. All of the stores he visited had only a few devices in stock and sell through appeared fine. These results are consistent with previous Jefferies UK and Canada checks on 2/1/13, 2/4/13, and 2/7/13. The firm reiterates their buy rating and $19.50 price target. Key points from the latest Jefferies Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) not below:
Not hearing talk of excess inventory on the ground
Peter and other analysts asked if any of the sales associates and managers had heard of too much inventory and the answer was consistently no. Additionally, they did know of two stores in their network that were sold out. So contrary to some reports, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s Z10 continues to sell steadily.
Price cuts are standard practice for new flagship phones
The analysts asked about BBRY price cuts and if this indicated waning demand or issues. Again this was deemed standard practice and brought the Z10 inline with the iPhone 5. They asked how quickly the iPhone 5 price fell and we were told one month or so.
Not just about the phone
While the Z10 is not central to the firm’s buy thesis, there is continued steady demand in the UK as well as over 50 carriers and in 21 countries now launched. They see upside to consensus BBRY estimates and highlight the huge MDM opportunity for BBRY.
Consistent with our previous UK and Canada checks
The firm’s initial checks in the UK at Carphone Warehouse, O2, Vodafone, Orange, and EE that indicated widespread and robust demand. They followed up with additional UK checks of 85 stores after the initial weekend of sales which showed
continued solid demand. They conducted checks with 50 stores in Canada that also showed solid demand for BBRY.
Contradictory Picture
Other analysts have come to an opposite conclusion regarding Z10 and BBRY itself. Analysts at Canaccord Genuity state that Z10 sales have been slow in the UK and Canada. Other analysts have come to the same conclusion regarding BBRY. However, analysts at Goldman Sachs recently attended an event and noted that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) sales seemed to be strong in many countries including Canada and the UK.
