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4/12/2013
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BlackBerry Denies High Z10 Return Rate

BlackBerry says reports of high Z10 returns are "false and misleading," calls on the government to counter damage done.

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BlackBerry wants you to know that its Z10 smartphone is not being returned at higher rates than other smartphones. The company is going so far as to ask securities regulators in Canada and the U.S. to review a report that claimed consumers were returning the Z10 in droves.

The story began to unfold Thursday afternoon when two different analysts published unflattering reports about the Z10.

Detwiler analyst Jeff Johnston wrote in a report to investors, "We believe key retail partners have seen a significant increase in Z10 returns to the point where, in several cases, returns are now exceeding sales, a phenomenon we have never seen before." Detwiler did not explain how it came to that conclusion, nor did it explain how it is possible for returns to exceed sales.

[ Recent research on U.S. public opinion of BlackBerry 10 isn't likely to help the beleaguered company. Read BlackBerry Who? BB10 Has U.S. Image Problem. ]

BlackBerry reacted quickly to the report, issuing this statement late Thursday: "BlackBerry wishes to respond to media coverage today regarding speculation that there have been abnormally high levels of returns of BlackBerry Z10 devices. This is absolutely false. Our data shows that return rates for BlackBerry Z10 devices both in the U.S. and on a global basis are in line with or better than our expectations and are consistent with return rates for other premium smartphones in the market today."

Friday morning, BlackBerry escalated its response.

CEO Thorsten Heins blasted Detwiler's report, calling it "false and misleading." He reiterated that the Z10 is not seeing abnormal return rates. "To suggest otherwise is either a gross misreading of the data or a willful manipulation," Heins said in a statement. "Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged."

Accordingly, BlackBerry said it will put forth formal requests to the Securities and Exchange Commission in the U.S. and the Ontario Securities Commission in Canada to investigate the report. Detwiler refused BlackBerry's request to see the methodology used to obtain its results.

In the second report published Thursday, ITG analyst Joe Fersedi wrote that the Z10 launch "started poorly and weakened significantly as the days passed." He went on to say that Z10 sales are "in line -- to marginally ahead of -- anemic sales" of BlackBerry's older smartphones. BlackBerry did not counter Fersedi's report.

BlackBerry, however, must go after Detwiler. Detwiler's report was published by The Wall Street Journal, which gave it some extra clout. Were BlackBerry to leave the report unchallenged, it could have a negative impact on BlackBerry's stock price. During the first few moments of trading Friday, the stock opened flat.

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