Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) now known as Blackberry has a long way to go according to new channel checks from analysts at Deutsche Bank. Deutsche Bank recently conducted a second survey of carrier stores to better understand how sales of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s Z10 devices were fairing (first channel check results). They used the same 30 carrier stores in the UK, but this time added 30 carrier stores in Canada. The story from each geography was very different. In Canada, many stores reported being sold out of the Z10 and the sales force was well-versed on the device’s attributes; however, a few representatives said that they did not receive a large amount of initial inventory.
In the UK, the sales force was better versed on the feature sets relative to the week prior; however, no stores were sold out. While we recognize 30 stores in each geography is not a statistically significant sample, the analysts do think it provides a decent indicator of early sales.
Highlights from the survey:
The iPhone 5 and SIII were the most recommended phones in both Canada and the UK, although Canadian stores did mention the Z10 with more frequency than UK stores
Out of 30 stores contacted in the UK, not one store was sold out compared to one being sold out a week ago
In Canada, Rogers and Telus were sold out at a majority of the stores contacted, while Bell had them in stock at most; however, some sales reps mentioned that they never received a sizeable initial inventory
The sales reps at Canadian stores were well-versed on the various aspects of the BB10 OS; the UK store reps were improving O2 in the UK was offering the Z10 for free with a £36 a month, On & On tariff with 1 GB of data.
From this, it appears that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) has done a much better job at defending their home turf. The sales representatives appear well-trained and while there are incidents of initial stocking levels being low, demand levels generally appear better in Canada than they do in the UK. The analysts believe that strong sales in Canada (the company’s home turf) is a requirement for BB10 to gain the traction globally.
In the UK, it appears that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is correcting the missteps in made in the first week. While this may not affect initial demand there, it will go a long way towards helping them gain mind-share with the consumer and hopefully that will translate into sales over the longer term.
Analysts at NBF echo similar ideas in a new research report. NBF state “the bulls will say that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) Z10 launched in Canada and the UK first because those are very loyal bases, production runs couldn’t support the U.S. launch, or kinks can be worked out ahead of the U.S. launch.” However, NBF believes the real reason for picking the UK and Canada first is due to the fact that the U.S. carriers have enough smartphones that they test new ones to their own drum beat and aren’t too interested in paying the monthly BlackBerry subscriber fee.
Overall, they still believe that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) has a number of issues to address before they feel like they have gained the necessary foothold. Deutsche Bank thinks that the consumer portion of service revenues will be challenged to extract the same fees as its preceding platforms, given that iOS and Android charge the carriers nothing, and the enterprise piece may following suit.
The analysts maintain their hold rating on Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB), as they think the initial signs of this launch do not indicate the strong sales they would like to see in order to become more constructive on the name.
