The success of BlackBerry's Z10 launch is called into question
12 April 2013

The success of BlackBerry's Z10 launch is called into question

There is a lot of PR posturing and threats are going backwards and forward. Unfortunately the damage may have already been done.

On Thursday 11 April 2013, analyst firm Detwiler Fenton alleged in a research report to their clients that BlackBerry customers were returning their Z10 units in higher than normal numbers to U.S. carrier Verizon. In some cases, the returns were reported to exceeded sales. This is a strong statement and it is difficult to unpack what is motivating this report.

BlackBerry is fighting back with a formal complaint. There isn't much else they can do to react to this PR problem. They have to save face and stand by their products. BlackBerry says that the report's findings were "absolutely false." BlackBerry claims it and its shareholders have been harmed, and are asking for an immediate investigation by authorities (BlackBerry chief legal officer Steve Zipperstein).

BlackBerry reported that it had shipped 1 million Z10 phones to its partners in the last quarter, but that didn't include U.S. sales, which began late last month. All eyes will be on BlackBerry's next earnings report for a more accurate tally of the Z10's performance. The quarterly numbers will say it all. There is also a lot of misleading data from BlackBerry because they report shipped devices and do not provide sold device numbers. Z10's that are returned or are unsold and in stores are never reported.

The drama bounced back to the media when in Friday 12 April 2013 where Detwiler Fenton issued a press statement indicating that "neither the research analyst for any officer or director of [the organization] has any financial interest in BlackBerry". There were grumblings that the company may have been financially profiting from short-selling or betting against BlackBerry shares.

BlackBerry share price dropped on the news with a minor rebound on Friday April 12 2013.

There is a lot of PR posturing and threats are going backwards and forward. Unfortunately the damage may have already been done. Neither organization indicated whether they planned to take legal or regulatory actions. The SEC never confirmed whether an investigation is ongoing.

BlackBerry’s Z10 launch got off to a shaky start with widespread reports that AT&T retail outlets were doing little to promote the device to customers and that many of its staff members were unprepared to answer questions about the device.

Industry reports showed that employees at a Verizon flagship store in Manhattan were able to give knowledgeable explanations about BlackBerry’s Hub and Balance features as key differentiators from other devices. Verizon is making more of a push to make the Z10 successful than its top rival has made so far.

With Verizon doing more to promote the Z10 and potentially seeing a high rate of return, BlackBerry could be burning some bridges with this large U.S. carrier.

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