BlackBerry Torch 9800 Sales Estimates Suggest Uphill Battle for RIM
If Research In Motion hoped its BlackBerry Torch 9800 would prove an instant success, new sales estimates may leave the company disappointed: according to analysts at RBC Capital Markets and Stifel Nicolaus, the new smartphone sold only 150,000 devices over the weekend.
According to the Wall Street Journal, the analysts arrived at that estimate after conducting retail spot-checks. The BlackBerry Torch 9800-RIM's first smartphone to feature both a sliding QWERTY keyboard and capacitive touch-screen-originally went on sale Aug. 12.
Amazon.com currently offers the Torch for $99.99, or half its original asking price of $199, with a two-year contract through AT&T. But the online retailer is also known for radically slashing smartphone prices, so the sale does not necessarily indicate a long-term loss of faith in the device, despite lukewarm early reviews.
RIM needs the Torch to be a hit on two fronts: with its traditional business audience, which has become more amenable to alternates such as the Apple iPhone and Google Android, and consumers, who represent a largely untapped market for the BlackBerry brand. The Torch had been tasked with appealing to both groups through its combination of businessperson-friendly features and multimedia capability.
In the wake of a soft sales weekend, though, some analysts are drawing comparisons to another sliding smartphone that started with a lot of hype, and ended up falling flat: the Palm Pre.
"RIM is beginning to repeat many of the Palm mistakes, one of them being hard-to-follow advertising campaigns," Rob Enderle, principal analyst with the Enderle Group, wrote in an Aug. 17 email to eWEEK. "And the brand was clouded by the Saudi Arabia and Indian News that the security in it was being compromised."
In essence, Enderle added, "they didn't execute well and they had to overcome a lot of negative news at the same time." The combination "damaged their launch significantly as a result."
The Torch includes RIM's new BlackBerry 6 operating system, which emphasizes consumer-friendly features such as unified social-networking feeds, wireless synching with DRM-free (Digital Rights Management-free) music on a user's PC, and a new Universal Search application that allows users to scan both their device and Web sites such as YouTube. Such an update, many analysts felt, was necessary if RIM wanted to compete against the rapidly evolving Android platform, as well as Apple's iOS4.
"In order to create a bulwark against incursions in their market from Apple and Google, RIM needs to expand its footprint," Charles King, an analyst with Pund-IT Research, told eWEEK in an Aug. 3 interview. "RIM became the device of choice in the business market because they represented the cutting edge of that market five, six, seven years ago."
Of course, businesses also tend to adopt new devices at a slower rate than do consumers. Given that, RIM could see a slow-and-steady rate of sales for the Torch, as more enterprises bring the device into the technological fold. Consumer adoption may also proceed at a respectable pace, allowing RIM to either maintain or build market-share in that area.
But considering that Google Android devices are selling at a reported rate
of 200,000 per day, and Apple's iPhone 4 sold nearly 1.7 million units during
its first weekend of release, RIM now faces something of an uphill battle.