In recent weeks, analysts have relied almost exclusively on contact with mobile phone retailers to determine whether the BlackBerry Z10 has been a sales hit or miss.Nathan Denette/The Canadian Press
Sales figures for the new BlackBerry smartphone have been a mystery since the device was launched nearly two months ago, but the veil will be lifted on Thursday when maker Research In Motion Ltd. reports its fourth-quarter results.
But the picture that will emerge for BlackBerry sales is only part of the whole story, which several analysts caution could still take another quarter to completely materialize.
"Buyers beware it is too early to [gauge] sell-through," National Bank analyst Kris Thompson wrote in a note to investors on Tuesday.
Since its last quarterly report, RIM has held a splashy launch in New York for its new phones, changed its overall corporate identity to BlackBerry and rolled out the Z10 touchscreen smartphone in several key markets around the world.
The fourth-quarter results will serve as a good reading of how that initial rollout went, and what to expect this year from the company, as it works to regain a position in the ever-changing smartphone industry.
In recent weeks, analysts have relied almost exclusively on contact with mobile phone retailers to determine whether the BlackBerry Z10 has been a sales hit or miss. The anecdotal evidence has proven mixed at best, with some relaying that stores were sold out in the U.K., while others said they couldn't find signs that stock was depleted.
Then there were questions about the number of phones each store received, leading to further confusion over how to qualify a murky product launch that may have stocked some stores with as few as two or three devices.
RIM has labelled the Canadian and U.K. launches a success, noting that the devices were sold at a faster clip than previous models, though it has declined to provide sales figures.
For analysts, the focus on Thursday will be where the company goes from here.
"We believe the real moment of truth will be the next quarter when the company has a full quarter of [the new phone] under its belt," Bill Kreher, a technology analyst with financial services firm Edward Jones said in an interview.
"What will be very important is the company's outlook for the upcoming 90 days."
During that period, the company is expected to release a version with a physical keyboard, which could attract long-time BlackBerry users who shy away from touchscreen devices. A release date hasn't been announced yet, though Canadians are likely to get the phone in April.
When the Waterloo, Ont.-based company reports its fourth-quarter earnings on early Thursday before markets open, analysts expect a fourth-quarter adjusted loss of 29 cents a share. Revenue is targeted at $2.8-billion (U.S.), according to a poll of analysts by Thomson Reuters.
Nearly as important will be subscriber numbers, which analysts consider a revealing figure into the popularity of the devices and a window into future revenue potential. The company receives monthly service revenue from each of its smartphone users.
In the third quarter, the company's subscriber base slipped by one million to 79 million from the previous quarter, and expectations have been for a further erosion as more users retired their older BlackBerry models over the holiday season.
"It is critical for the company to maintain that subscriber base as it transitions from legacy products to BB10," Mr. Kreher said.
Also on the radar will be how much cash the company still has in its coffers after paying for the phone launch and related marketing expenses. RIM has managed to keep a solid cash position of nearly $3-billion over the past year as it prepared the delayed models.
RIM chief executive officer Thorsten Heins told the Australian Financial Review last week that he will report a "pretty good cash position" for the quarter.
On Monday, Goldman Sachs trimmed its expectations of success for the new devices in the United States to a 20-per-cent probability from 30 per cent.