BlackBerry Z10 sell-outs continue in new

March 18 [Mon], 2013, 9:49
BlackBerry Z10BlackBerrys (BBRY)in a number of markets, and the latest round of launches has been no different. Following a note from Jefferies & Company analyst Peter Misek suggesting thesold out across numerous retailers in India, RBC Capital Markets Mark Sue and RBC Dominion SecuritiesPaul Treiberreport that the Z10 has indeed been well received in India and other new markets following its launch late last month. The duos checks have found stock-outs across India and other markets. They raised their February-quarter estimates to 500,000 units from 350,000 as a result, but they still seeselling 2 million smartphones in the May quarter as sales appear to be slowing in Canada and the United Kingdom.

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Numerous data points suggest Feb-qtr BlackBerry Z10 sell-through is stronger than Street expectations, the analysts wrote in a note to clients on Thursday. 1) BlackBerry indicated sell-through is 40% above its (low) projections; 2) several larger retailers have acknowledged strong Z10 demand; 3) the Z10 is no. 5 on Carphone Warehouses top 10 monthly phones in the U.K.; and 4) India sold out in two days. The breadth of the launch, covering est. 35% of BlackBerrys sub base, also appears wider than Street expectations. However, Z10 returns are higher than normal and AT&T pre-orders remain inconclusive.

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Sue and Treiber continued, Were taking up our Feb-qtr BB10 estimate from 350k to 500k. For May, were maintaining our 2M unit estimate. While RIM has received a 1M+ unit order from a partner, sell-through appears to be slowing in Canada and the U.K. from launch-week highs (this is normal) and U.S. demand is still too early to quantify. Were taking down Feb-qtr legacy BlackBerry shipments from 6.7M to 6.3M.

RBC notes that the BlackBerry Z10 has been well-received by BlackBerry loyalists , and many are still waiting for the BlackBerry Q10. As such, Sue and Treiber see that launch as the next big catalyst for BlackBerry shares, which currently carry aSector Perform rating and an $18 price target at RBC.

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