Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM), which rebranded itself as Blackberry seemed to have a good start with the launching of its two smartphones Z10 and Q10, which will be available in the market within a few months.
Blackberry’s Z10, which is equipped with a 4.2-inch, 356 pixel-per-inch touch screen has a strong demand from consumers in the United Kingdom. According to a report from Peter Misek, analyst at Jefferies, consumers were lining up at a number of retailers selling the device. Misek observed that there is a widespread sell-out of the white Z10 and the supply for the black Z10 is limited in the country.
“We believe Carphone Warehouse is seeing widespread sell-outs, while O2, Vodafone, Orange and EE are seeing robust demand. We estimate sell-in to be at least several hundred thousand units,” Misek said.
The strong demand for Z10 in the United Kingdom is good news and crucial for Blackberry’s revival even if the market is smaller than the United States. “To put that (early numbers of Z10 devices) in perspective, the iPhone had first weekend sales of 5 million plus in the U.S. The U.S. is five times larger so continued strong sales could bode very well for Blackberry,” Misek said.
The research firm also cited that preorders for the device in United Arab Emirates and Canada are solid. According to Misek, preorders at Rogers, Bell and Telus in Canada reached tens of thousands of Z10 devices.
Misek added that Blackberry’s initial sales bode well for the broader launch of its devices in March, however he thinks the company will still miss analysts’ estimates for the February quarter as the research expected a March launch in the United States. He said, “For the Feb Q, we estimate $2.5B/ ($0.42) vs. St $2.9B ($0.31), but the Street is also too pessimistic in the May Q and estimates $3.2B ($0.09) vs. ours $4.2B/$0.33. We do not think the Street is incorporating the high carrier support (e.g. $600 ASP and volume commitments) into estimates.”
Jefferries upgraded its rating for Blackberry to buy and raised its price target to $19.50.