BlackBerry Torch selling slowly: analysts
Things are going from bad to worse for Research In Motion, with sales of its latest device — the BlackBerry Torch — underwhelming analysts and seeing discounts on Amazon.com after its U.S. release four days ago.
Analysts at Citi and Goldman Sachs said on Tuesday that sales of the device were "tepid" and "underwhelming," respectively, according to the Wall Street Journal. The analysts said they saw no lineups at stores to buy the device, and that most buyers appeared to be existing BlackBerry owners.
RBC Capital Markets and Stifel Nicolaus analysts were more positive but said the Torch had sold only 150,000 units over the weekend, a drop in the bucket compared with the 1.7 million iPhone 4 units that Apple sold in its first weekend in June.
The iPhone 4, however, launched in five countries, as opposed to the Torch, which so far has only been released in the United States.
The Torch, a touch-screen BlackBerry that also touts a slide-out keyboard, was released through U.S. carrier AT&T on Thursday for $199 US with a two-year contract.
Amazon, however, has been selling the device for $100. Some analysts expect AT&T to match the price cut.
"The device will ultimately have to sell in the marketplace side-by-side with Apple's iPhone," Stifel Nicolaus analyst Sanjiv Wadhwani said in note to clients. "To sustain U.S. sell-through momentum into the November quarter, we believe the price of $199 on contract will have to fall."
A spokesperson for RIM said Amazon's lower pricing was a common promotional strategy that the website has used with many other product introductions in the past.
Waterloo, Ont.-based RIM hyped the Torch as the best BlackBerry ever at media event in New York earlier this month. The phone features the new BlackBerry 6 operating system, multimedia features and a web browser that is designed to be more appealing to the larger consumer market.
Before the event, the pressure was on RIM to deliver a new device that would reverse the momentum being gained by Apple's iPhone and Google's Android devices. RIM's market share has been slipping, and its recent earnings and revenue reports disappointed analysts. Its share price had also slid around 20 per cent since March.
Technology reviewers were generally pleased with the improvements offered in the Torch, but were unimpressed over all.
"It's tough to feel really excited about the BlackBerry Torch and OS 6 after heavy testing," wrote technology review site Engadget. "While there are notable improvements here and much that is laudable, what we're ultimately left with is, at its core, more of the same."
Canada's big three wireless carriers, Bell, Rogers and Telus, have all said they plan to offer the Torch this year.
The poor sales come on top of RIM's mounting woes with governments around the world. A number of countries, including Saudi Arabia and India, have in recent weeks threatened to shut down BlackBerry access for users unless RIM allows governments to snoop through their data.
RIM shares were at $51.21 in mid-day trading on the Toronto Stock Exchange, near their 52-week low of $50.06.