This Friday will be a big day for Research In Motion Ltd (NASDAQ:BBRY). The troubled smartphone maker is hoping for a renaissance, powered by a variety of new phones running the company’s QNX-based BB10 OS. The company’s upcoming earnings report will be the second since BlackBerry 10 smartphones started to roll out worldwide . It is also the first report since the launch of the Q10: the first BB10 phone with Research In Motion Ltd (NASDAQ:BBRY)’s signature QWERTY keyboard. The report will therefore provide some insight into the demand for these new models.
The new Research In Motion Ltd (NASDAQ:BBRY) platform is nowhere near challenging market-leaders Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), but investors hope that it will be able to carve out its own niche in the rapidly growing smartphone market. However, observers are sharply divided in their beliefs about just how much traction BlackBerry 10 is gaining. Next week’s earnings report and the associated conference call should help a lot in terms of understanding whether Research In Motion Ltd (NASDAQ:BBRY) can mount a real comeback.
As my Foolish colleague Tim Brugger recently highlighted, BlackBerry analysts just don’t know what to expect from the company. Last Friday, an analyst at Societe Generale upgraded the company, writing that demand for the new BB10 phones has been stronger than expected, and the company could have sold more than 5 million units last quarter. Analysts at RBC and Jefferies are also expecting strong results for the recently ended quarter.
However, there is an even larger pool of analysts who are convinced that Research In Motion Ltd (NASDAQ:BBRY) is on the brink of collapse. This Wednesday, an analyst at Bernstein Research cut his rating on the stock, arguing that consumer demand for the new BB10 phones has fallen off rapidly. Similarly, longtime BlackBerry bear James Faucette of Pacific Crest opined that the vast majority of BB10 phones being produced are going into inventory, and that global BB10 phone demand is less than 500,000 units per month .
Let’s see some numbers
Opinion on Wall Street is thus hopelessly divided. Over the past six months or so, a few analysts have crossed over from the bear camp to the bull camp or vice-versa, but for the most part they have become ever more convinced that their initial beliefs were true. Furthermore, the market is flooded with a variety of rumors about BlackBerry supply and demand. We need more hard data to get a decent sense of the company’s chances.
Research In Motion Ltd (NASDAQ:BBRY) investors should be looking for two things on Friday; a sales number for BlackBerry 10 phones (anything above 4 million is good, while anything under 3 million is bad), and some commentary on sell-through. Sell-through refers to the number of units actually in the hands of users, and thus excludes phones sold to wholesalers and retailers that are still sitting in inventory. Last quarter, CEO Thorsten Heins said that at least two-thirds to three-quarters of the units shipped by BlackBerry had already sold through to end users . That’s a very strong figure, and investors need to see if the company can repeat that performance.