BlackBerry's Turnaround Hinges On Q10 - InformationWeek

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6/17/2013
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BlackBerry's Turnaround Hinges On Q10

Strong early sales of the keyboard-packing Q10 give BlackBerry's resurrection a chance.

A few analysts say that sales of the Q10, BlackBerry's QWERTY-equipped smartphone, are off to a good start. The phone launched in over a dozen countries in May and reached the U.S. this month. It turns out the Q10 is the smartphone the BlackBerry faithful have been waiting for.

Wells Fargo analyst Maynard Um recently had some positive things to say to investors with respect to the Q10. Um's channel checks at U.S. retail stores show that it is selling well.

"[There has been] good Q10 customer interest and demand," said Um. "The Q10's launch has been much more successful than the Z10 launch, which is consistent with our view that the diehard BlackBerry installed base of 76 million loyal to the keyboard presents a strong upgrade opportunity."

[ Apple's release of iOS 7 will make the smartphone market more competitive than ever. Read iOS 7 Changes Smartphone Battle. ]

Um isn't the only one who thinks the Q10 is doing well. Societe Generale analyst Andy Perkins believes BlackBerry will sell as many as one million Q10s during its first fiscal quarter. Correspondingly, Perkins raised his rating of BlackBerry stock from "sell" to "buy."

The Q10 has the famous BlackBerry keyboard and a 3.1-inch touchscreen with 720 x 720 pixels. The smartphone boasts an 8-megapixel camera, 1.5 GHz dual-core processor from Qualcomm, 16 GB of storage plus support for microSD cards, NFC, LTE, and the BlackBerry 10.1 operating system with BlackBerry Messenger.

The device's early success matches BlackBerry's expectations for the smartphone. Last month, chief operating office Kristian Tear said that 60% of Fortune 500 companies are testing BlackBerry devices, including the Q10. Business customers have been BlackBerry's traditional core subscriber base. In recent years, enterprises have been switching to Apple's iPhone.

"There are a lot of very loyal BlackBerry keyboard users out there who have been waiting for this, and I think with the Q10, we will also be able to win back prior BlackBerry customers who are now trying other platforms," said Tear.

BlackBerry has more hardware on deck for later this year. Next up will be the Q5, a low-cost QWERTY-equipped BlackBerry that will fill the role once held by the Curve series of devices. It has the same display that the Q10 does, but it drops the dual-core processor to 1.2 GHz, lowers the camera resolution to 5 megapixels, and halves the internal storage to 8 GB. BlackBerry is also prepping a new high-end smartphone for later this year, called the A10. The A10 will be an all-touch device more akin to the Samsung Galaxy S4 than to BlackBerry's Z10, which debuted earlier this year. Most of the A10's features have yet to be ferreted out.

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