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New qwerty keyboard launch for 3Q adds product pipeline for BBRY

BBRY delay 02.07.2013Enlarge GraphRecent reports suggest the launch of an additional version of the Blackberry 10 from mobile handset maker Blackberry (BBRY). On January 30th, the company announced the imminent launch of the new Z10 handset (the latest Blackberry with touch screen technology) into Canada and the U.K. and also that the Z10 would be available in the U.S. market in mid-March. On February 7th, the handset maker padded its new product pipeline by saying it will introduce its Q10 handset (its latest Blackberry handset with a physical or qwerty keyboard). Each new product announced is important for this manufacturer that has seen drastic sales and handset volume declines.

Blackberry’s revenues and handset volumes shipped have been under siege over the past couple of years as the has company faced more competition from Apple (AAPL) with new iPhone launches and Samsung with its line of Galaxy phones. The decline in revenues at Blackberry has been dramatic which is the reason that new product introductions are so important.  BBRY has seen its handset revenue decline from over $4.4 billion in the first quarter of 2011 to just $1.6 billion in the most recent quarter in 2012. This has been a result of its handsets shipped going from over 14.8 million units to under 7.0 million units over the same time period.

While undoubtedly the new introduction of the new Blackberry 10 in two versions (the Z10 and the Q10) will move the units shipped number off of these lows, the timing and the geographic introduction will also be vitally important. In our article Why Asia Pacific is so important to AAPL, RIMM, and NOK, we outline that the Canadian and U.K. launches of these new products for BBRY likely won’t be that meaningful because of the modest size of Canada (just 1% of global mobile shipments) and the U.K. (just 3% of global mobile shipments). Hence, investors will have to wait until the U.S. introduction of the Blackberry Z10 in March and then the Q10 introduction in June or July. The U.S. market is 9% of the global mobile market, so this introduction will likely have a much bigger impact on Blackberry’s revenue and unit numbers.

While any incremental announcement from Blackberry will likely be met with investor optimism because sentiment has been so low, we point out that in order to claw back share taken from Apple, Samsung, and Nokia (NOK) these new product introductions will have to coincide with the appropriate market launches and likely BBRY investors won’t see a substantial improvement until the firm’s fiscal 1Q14 to be reported on June 27th. The firm’s new product pipeline however is headed in the right direction.

The Realist Discussions

  • Satv raulia

    There is clearly an inflection point at the end of 2012.The great success of Z10, pricing ,and online sales in advance to unreleased territory. BB 10 may capture up to 19 percent of market share after all the original inventor has got the look and stuff in hand.In this decade ,people has also learned the patent war and the value of being soil owner.RIMM BB is real owner of smartphone,Thus far they may capture entire market back to their fold slowly.

    • Sarah

      How do you think Blackberry will capture 19% market share? Do you mean in the US or globally?

      • Analyst

        Hi Sarah – to what reference to 19% share are you talking about – I don’t see any mention of market share for BBRY and their current share is just over 4% currently. Please let me know

  • Pjews

    May be not in smartphone sales. If they where to license out their new OS, with limitation. The company have great potential as a major player in the future