Analysts at RBC Capital markets believe that enterprise demand could stimulate the sales of Research in Motion Ltd (NASDAQ:BBRY) (TSE:BB) for its Blackberry Q10 citing that a significant number of users will potentially upgrade to the smartphone, but they think that it will take quite a time.
Blackberry Q10 Sales Remain Healthy
RBC Capital analysts, Mark Sue and Paul Treiber noted that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) sell-through in Canada and United Kingdom for the Blackberry Q10 remains healthy though its subsided from the launch rush after two weeks.
Sue and Treiber commented, “We expect enterprise BB10 sell-through to build over the coming months, particularly after mid-June availability of BES10 SMS/PIN archiving.” The analysts also opined that BYOD headwinds maybe difficult to ignore because Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co Ltd (LON:BC94) (KSE:005930) and other competitors are improving their enterprise security offerings.
According to Sue and Treiber, the Blackberry Q10 ranked number 10 on the Carphone Warehouse’s list of top monthly phones in the United Kingdom. The analysts also surveyed stores in Canada and United Kingdom and 5 percent of the stores sold out the Blackberry Q10 last week.
The analysts also noted that Research in Motion Ltd (NASDAQ:BBRY) (TSE:BB) global Blackberry Z10 and Blackberry Q10 channel fill will drive its shipments for the first quarter and second quarter. According to them, the Canadian smartphone manufacturer is expanding its distribution for the Z10 device in approximately 10 countries and in the fourth quarter of the current fiscal year to more than 70 countries worldwide. They also noted an early decent interest in the United States.
In a research note to investors, Sue and Treiber wrote, “BB10 channel fill and enterprise uptake give Blackberry time to rebuild its business and develop new enterprise and consumers services to offset the shift away from its mandatory service model. Improving margins, retained margins, and strengthening the balance sheet may enable Blackberry to carve a niche in the expanding smartphone market. Higher Z10 and Q10 mix should show in margin improvement.”
The analysts maintained their EPS target for Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) at $0.10 for CY14 and recommended a “perform” for the shares of the company with $18 price target.
Meanwhile, during the Blackberry Live conference in Orlando, Florida today, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) introduced the Blackberry Q5, the lower-cost QWERTY smartphone and it also announced that Blackberry 10.1 operating system powers the Blackberry Z10. The Q5 will be available in the United States in July.
Thorstein Hein, CEO of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) said, “This is specifically designed and built for selected markets, such as emerging markets; it’s a sleek, slim, high-performance device.”
Heins added that the BBM platform will be available soon on Android and iOS. According to him, the messaging app will be available this summer. “The BB10 platform is so strong and the response has been so good that the time is right for BBM to become an independent mobile messaging platform,” said Heins.
The company also introduced its Enterprise Service 10.1, an update for its flagship enterprise software that provides security for Blackberry, iOS, and Android devices.
Kristian Tear, chief operating officer of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) said, “We have been doing it longer and better than anyone else in the industry. “BlackBerry has security baked in from the ground up. We start thinking about it all the way back to our supply chain.”
