BlackBerry (BBRY), the company formerly known as Research in Motion, has a lot riding on its newest operating system and line of smartphones. The fate of the company perhaps resides in the success of the new products after massive losses in recent years from plunging sales amid stiff competition from companies like Apple (AAPL), Google (GOOG) and Samsung (SSNLF).
Needless to say, BlackBerry did not need the news put out by Detwiler Fenton & Co. on Thursday saying that U.S. retailers were experience high return rates of new Z10 phones because of an unintuitive interface, lack of apps and other reasons. Detwiler went on to say that in some cases, returns were exceeding sales, “a phenomenon we have never seen before,” according to reports.
Waterloo, Ontario-based BlackBerry denied the reports on Thursday, but took a bigger shot at Detwiler on Friday with an announcement that it is seeking Securities and Exchange Commission and Ontario Securities Commission review of the “false and misleading report about retail return rates for the Company’s new BlackBerry Z10 smartphone.”
Verizon (VZ), the largest U.S. carrier, also refuted the claims of Detwiler.
"Sales of the BlackBerry Z10 are meeting expectations and the data we have collected from our retail and carrier partners demonstrates that customers are satisfied with their devices," said BlackBerry President and CEO Thorsten Heins.
Heins further said that statistics show that the company is at or below expectations for returns and in line with the rest of the industry. “To suggest otherwise is either a gross misreading of the data or a willful manipulation. Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged," the BBRY chief said in a corporate statement.
“Everyone is entitled to their opinion about the merits of the many competing products in the smartphone industry, but when false statements of material fact are deliberately purveyed for the purpose of influencing the markets a red line has been crossed," added Steve Zipperstein, chief legal officer at BlackBerry.
Detwiler did not provide its report to investors or its methodology to support the statements to BlackBerry. Detwiler issued its own rebuttal to BlackBerry’s press today, stating that it is confident in its research and that it is not the only research company that has made similar claims about consumer responses to the new Z10 phones. ITG Investment Research, amongst others, has also commented earlier this week on a weak U.S. launch for the Z10.
Right or wrong, the news smacked BlackBerry shares on Thursday, falling nearly 8 percent to close on Thursday at $13.55. Shares have squeaked upward in Friday trading with shares up by 11 cents at $14.04 just after noon eastern time.
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