BlackBerry, the beleaguered Canadian handset maker, today said it is contacting the Securities and Exchange Commission and the Ontario Securities Commission for formal reviews of the analysts Detwiler Fenton, after its analysts issued a statement saying that its new flagship handset, the BB Z10, was seeing record-levels of returns in retail sales — reports that BlackBerry today says are “false and misleading.”
“Sales of the BlackBerry® Z10 are meeting expectations and the data we have collected from our retail and carrier partners demonstrates that customers are satisfied with their devices,” said BlackBerry President and CEO Thorsten Heins said in a statement. “Return rate statistics show that we are at or below our forecasts and right in line with the industry. To suggest otherwise is either a gross misreading of the data or a willful manipulation. Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged.”
The move is a sign of just how sensitive BlackBerry is right now to getting the launch of its new device right — and how harmful publicity slams like this one can be as a result.
Detwiler’s report, which noted, according to Bloomberg, that devices were being returned because the interface was not intuitive enough, spurred publication of stories like this one from the Motley Fool called, “It Gets Worse, BlackBerry Investors.” Its share price dropped nearly 8% yesterday.
Detwiler is not the only analyst that has come out with some negative BB10 sentiment: ITG Investment Research also issued a report describing slow sales. That report is not named in BlackBerry’s statement.
BlackBerry’s PR push is just as important with shareholders and the market as it is with consumers — and given that its traditional, core user base consists of enterprises, BlackBerry’s positioning in the business press is perhaps particularly significant.
On the consumer side, the BB10 devices are seeing some big price drops, down to $99 as of yesterday on Amazon, for example.
Today’s statement about appealing to regulators comes after Verizon also refuted the claims.
Detwiler Fenton has been a long-time bearish observer of the company and appears to have been the first to identify electronics distributor Brightstar as the mystery buyer of 1 million advance BB10 devices. Its claim was that Brightstar was buying the devices on behalf of Verizon because the carrier was trying to minimize risk on a product it didn’t trust to sell well. To be clear, BlackBerry and Verizon never confirmed this was the case.
Meanwhile, BlackBerry is getting another boost to its distribution, with a deal for the Canadian’s export credit agency to loan $256 million to Telefonica for orders of BB10 devices and related services — announced last week. This will potentially be a big help in getting more of these devices out to the emerging markets in Latin America where Telefonica has a large portion of its 316 million subscribers.
BlackBerry Seeks U.S., Canadian Review of False Reports on Return Rates
WATERLOO, ONTARIO–(Marketwired – April 12, 2013) – BlackBerry® (NASDAQ:BBRY)(TSX:BB), a world leader in mobile communications, today said it would seek Securities and Exchange Commission and Ontario Securities Commission review of a false and misleading report about retail return rates for the Company’s new BlackBerry Z10 smartphone.
“Sales of the BlackBerry® Z10 are meeting expectations and the data we have collected from our retail and carrier partners demonstrates that customers are satisfied with their devices,” said BlackBerry President and CEO Thorsten Heins. “Return rate statistics show that we are at or below our forecasts and right in line with the industry. To suggest otherwise is either a gross misreading of the data or a willful manipulation. Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged.”
BlackBerry and Verizon Wireless, the largest U.S. carrier, on Thursday refuted claims from research and investment firm Detwiler Fenton that BlackBerry Z10 devices were being returned in unusually high numbers. Detwiler Fenton refused to make either its report to investors or its methodology available to BlackBerry, even after the Company said the firm’s findings were “absolutely false.”
BlackBerry Chief Legal Officer Steve Zipperstein said: “These materially false and misleading comments about device return rates in the United States harm BlackBerry and our shareholders, and we call upon the appropriate authorities in Canada and the United States to conduct an immediate investigation. Everyone is entitled to their opinion about the merits of the many competing products in the smartphone industry, but when false statements of material fact are deliberately purveyed for the purpose of influencing the markets a red line has been crossed.”
Zipperstein said BlackBerry would present its formal request to U.S. and Canadian regulators in the next several days.
A global leader in wireless innovation, BlackBerry® revolutionized the mobile industry when it was introduced in 1999. Today, BlackBerry aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Asia Pacific and Latin America. BlackBerry is currently listed on the NASDAQ Stock Market (NASDAQ:BBRY) and the Toronto Stock Exchange (TSX:BB). For more information, visit www.blackberry.com.