Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) plunged as much as 5.64 percent to $13.86 due to rising concerns over the success (or failure) of its newly launched Z10 smartphones. The fully touchscreen device has started showing troubling signs. Today’s fall is the heaviest intraday decline of the stock since March 25.

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Why are investors so panicked? Well, there are a number of reasons. One, ITG Investment Research analyst Joseph Fersedi said in a research report that Z10’s U.S. launch was poor, and continued to weaken with each passing day. Joseph Fersedi contacted the independent dealers to check the sales. In fact, many retailers said that a large number of customers have started returning their Z10 smartphones as they don’t find the interface intuitive.

Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is counting on Z10 and Q10 devices to change its fortunes after the BlackBerry maker lost ground to iPhone’s and Android devices. The Q10 model is scheduled to debut in Canada on April 30. Retailers in Canada and the United Kingdom have started taking pre-orders for Q10.

The Z10 device was launched in the United States in late March on Sprint Nextel Corporation (NYSE:S), AT&T Inc. (NYSE:T) and T-Mobile USA. But reports suggest that the carriers haven’t made any aggressive attempt to promote the device. When the device debuted on AT&T, many stores reported that they didn’t even have demo units for display.

Another reason is that the actual gross margins on Z10 devices are much lower than what Wall Street thinks. Yesterday, Credit Suisse said when Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) reported higher than expected fourth quarter earnings, most investors believed that it was due to higher gross margins on Z10 devices. But the reality turned out to be entirely different.

Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s 10-K filings reveal that the improved gross margins were a result of amortization due to an accounting change, not because of Z10. The amortization declined by $127 million from Q3 to Q4, improving the company’s hardware gross margins by as much as 510 basis points. Without lower amortization, gross margin would have been much lower.