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Production of Blackberry Z10 and Q10 cut in half – low demand or the A10?

News   •   Jul 17, 2013 18:40 BST

Production for the Z10 and Q10 has been cut in half. Does this mean that there is low demand for smartphones running BB10, or does this mean that the Canadian phone maker is preparing for the unveiling of the upcoming A10?

Barron’s reports Jefferies & Co. analyst, Peter Misek, saying, “The company has said that such things are part of normal lifecyle management of preparing for new devices that will be coming out. We do believe there is this new A10 device coming this fall. However, having price cuts this early before a new product is actually announced seems unusually early to us. It seems hard not to conclude there is excess inventory. The problem for BlackBerry include their not having enough apps, and missing some of the key apps. They’ve really got two choices. They can keep iterating, trying to improve their ecosystem, trying to improve the devices, and try to close the gap with Google’s (GOOG) Android and [Apple’s] iPhone. That will be challenging given that they have far more limited resources compared to those two. The other possibility is to promote this secure workspace they are offering to allow their apps to work on Android and iPhone, and go down the route of being more of a services company rather than a hardware company. We’re a little bit cautious about that dynamic, because half their revenue in hardware is coming from places such as the Middle East and Africa. As Android penetrates those markets, we think the hardware business goes away for BlackBerry there, and those are not the kinds of markets that are most likely to take up BlackBerry’s services offers. So they’re really dependent upon Europe and North America. The other question is, we don’t know if they can make their services work properly on the iPhone. And they face competition for mobile device management from the likes of Good Technology and Mobile Iron.”

What do you think? Is there a low demand for Blackberry 10 handsets, or is the Canadian phone maker preparing for the unveiling of the upcoming A10? Let us know what you think through a comment.

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