BlackBerry Z10 flops in the US

Mar 27, 2013

Apologists for the poor sales performance of the new device in the market that, were you to believe BlackBerry's top management and advertising agencies, would quickly propel the company back into serious contention with the likes of Apple, Samsung and Google's AndoridOS-based devices and allow it to claw back market share it has lost to its rivals, say sales have been limited because, for the present, only AT&T is selling the Z10 in the US and is failing to put much marketing muscle behind the device.

So now much store is now being placed on the fact that Verizon will start to sell the Z10 tomorrow, just in time for the Easter holidays. Unfortunately it looks as though the handset would stand a better chance of mass sales if it was actually made out of chocolate.

Meanwhile, Sprint has point-blank refused to carry the Z10 saying that it doesn't want expensive inventory clogging up its shelves and warehouses. How's that for a vote of confidence?

Analysts are also asking, if the potential for the new device is so very strong, why is AT&T not spending very much at all on advertising and marketing it. Could it be, they wonder, because they are contractually bound to take a certain number of the handsets, but are only too well aware from their own research and consumer's luke-warm reaction to the Z10 that it is already a lost cause?

Furthermore, BlackBerry is placing much reliance on loyal customers who always buy BlackBerry upgrades. The trouble is that this is a dwindling band and when they have made their purchase of the Z10, or even if they wait for the arrival of the Q10, which has a keyboard, a feature much beloved of some BlackBerry diehards, who else out there is going to buy them?

Blackberry recently blew it's own trumpet long and hard about a mysterious deal wherein a mystery customer apparently bought a million new BlackBerry handsets. If this is true then why won't BlackBerry reveal the name of the bulk purchaser? The company has been asked and asked again but instead of making a PR coup it is keeping uncharacteristically quiet. There must be a reason for that.

Confirmation that the deal is in fact real can be obtained by trawling around various US-based websites and those same sites say the buyer of all those handsets is the Florida-based mobile handset distributor, Brightstar

According to AllThingsD, Brightstar was able to make the massive purchase because it manages inventory for Verizon and so knows it will shift at least some of the stock it has bought, and, if Verizon's sales don't meet expectations it will be able to get rid of what's left hough its own national and international distribution channels.

Such a strategy indicates that Verizon too doesn't have a lot of faith in the Z10 and has hedged its bets by doing a deal with an intermediary so that it won't be left with unsold handsets in its shops and egg on its corporate chops.

Thorsten Heins, BlackBerry's current CEO, continues to claim, and maybe actually believe, that all is going swimmingly. After all, he insists that the Z10 is a success and that the devices are selling like hot cakes. The reality though seems to be somewhat different with many retailers (such as those in the UK) cutting prices to get the things out of their shops and off the books.

Tellingly, Citigroup (amongst other analysts) has downgraded BlackBerry after discovering that just 4.2 per cent of retailers in the US have sold out of the Z10 and every one of that tiny number stocked no more than a dozen of the devices.

So, BlackBerry is very unlikely ever to get back to its glory days of yore and seems destined to be an also-ran and niche player with a loyal but small following of aficionados and global market share of about five per cent. It's either that or eventual oblivion.

But then it it wasn't for Venetian blinds, it would be curtains for all of us.

We can't just leave it at that. There is an earnings report from Blackberry tomorrow and we'll fill you in on the detail.

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