Latest News

The Canadian Press - ONLINE EDITION

Blackberry shares fall eight per cent as hype over smartphone launch wears off

By: David Friend, The Canadian Press

Posted: 02/13/2013 4:32 PM | Comments: 0 | Last Modified: 02/13/2013 5:19 PM

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.

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More Latest News

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.