TORONTO - Shares of Blackberry (TSX:BB) dropped more than eight per cent Wednesday as the sheen continued to wear off from the company's smartphone product launch two weeks ago.
The Waterloo, Ont.-based company, formerly known as Research In Motion, saw shares decline $1.25 to close at $14.00 on the Toronto Stock Exchange, amid widespread weakness in the information technology sector.
The company's stock has fallen 21 per cent from the height it reached in late January before the new BlackBerrys were unveiled at a much-hyped event that was simulcast to various cities around the world.
Several analysts have expressed concerns about the slow launch of the new devices, which first rolled out in the U.K. and Canada with the touchscreen BlackBerry Z10. The United States won't get the touchscreen model until next month.
Much of the concern involved the staggered release of the BlackBerry Q10, a more traditional keypad version of the smartphone that won't hit stores until at least April.
"The consumer products market requires fast innovation cycles," said National Bank analyst Kris Thompson in a note.
"BlackBerry has not proven the ability to launch products fast enough to compete any longer."
Thompson also addressed concerns with the lack of clarity for BlackBerry's new service revenue model. In December, BlackBerry chief executive Thorsten Heins suggested the lucrative service fees charged to BlackBerry subscribers for its secure network won't necessarily be a priority for the company anymore.
BlackBerry plans to launch an a la carte menu of services where both enterprise customers and casual smartphone users can pick their packages, ranging from a "platinum package'' that covers all of the security features offered today to more stripped back packages that would focus less on security and more basic email services.
Details of the changes have not been disclosed, and Thompson said BlackBerry needs to bring an end to the "mystery."
"Investors need to understand how that revenue line could decay over the next several years," he said.
"Without such information, investor judgement is severely impaired."
Thompson also said he doesn't see the BlackBerry reversing its marketshare decline, but only slowing the outflow by convincing some customers to upgrade from their older BlackBerry models. He said the phone doesn't seem to have much appeal to iPhone or Android users.
"The apps just aren't there," he added.
The BlackBerry Z10 has received relatively favourable reviews, and the company and some carriers have said that early sales were encouraging.
After the Canadian launch, Blackberry issued an enthusiastic statement which said the BlackBerry Z10 sales were "50 per cent better than any other launch day in our history in Canada," though it declined to release actual sales data.
Similarly enthusiastic claims were issued by carriers Bell (TSX:BCE) and Rogers Communications (TSX:RCI.B) who also did not release hard sales numbers.