Yesterday, Cleveland Research analysts claimed, “early feedback on Q10 sales in Canada and the UK suggest volume below expectations, and sell-through on Z10s was probably half the run-rate seen at introduction.” They also claimed build cuts were planned due to slowing sales.
Jefferies’ analyst, Peter Misek, who was once quite the BlackBerry bear, is saying he’s heard the contrary. According to his checks, the BlackBerry Q10 has “very robust” demand in Canada and the UK.
“We spent yesterday afternoon contacting dozens of UK stores amongst the various Carphone Warehouse locations and carrier branded stores. Our analysis of over 50 stores indicates robust and broad demand with one exception. Orange stores, both the co-branded Carphone Warehouse locations and the Orange retail stores had inventory, where every other brand was either sold out or had limited stock,” says Misek of the UK.
The demand in Canada is strong and better than expected. “We also conducted store checks in Canada. Initially, only stores in the Greater Toronto Area received stock, but now the rollout has continued across the country. After randomly calling 10 stores of different brands, we stopped as the conclusion was clear: broad, strong, and better than expected demand.”
However, Misek has heard of build plan cuts, but it isn’t what the market talk leads on. According to Misek, it is only BlackBerry 7 devices that are seeing the cuts, but that should help margins.
“We additionally rechecked with our supply chain database (as a reminder we track over 400 suppliers globally), and we found no change to last week’s build plans,” the analyst comments. “We have a difficult time calibrating how some market participants believe quarterly build plans were around 12M or 4M per month. We have always had 2M+ a month or 6M+ a quarter. Keeping in mind that our sell-in estimates of 4M units shipped are already significantly above market expectations of 3M units shipped this quarter. The builds of certain market participants are 4x market expectations, which to us makes little sense.”
Misek continues his Buy rating with price target of $22.00 for BlackBerry.