BlackBerry to ask for probe into report on Z10 returns
The Canadian smartphone maker says it will ask the SEC and the Ontario Securities Commission to review a "false and misleading" report from research and investment firm Detwiler Fenton.
The Canadian company said that within the next several days, it will formally ask the U.S. Securities and Exchange Commission and the Ontario Securities Commission to review a report from research and investment firm Detwiler Fenton that claims there have been "unusually high" return rates for the recently released device.
BlackBerry Chief Legal Officer Steve Zipperstein said in a statement:
These materially false and misleading comments about device return rates in the United States harm BlackBerry and our shareholders, and we call upon the appropriate authorities in Canada and the United States to conduct an immediate investigation. 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.Detwiler Fenton yesterday issued a report saying that returns of the Z10 were exceeding sales in some instances. BlackBerry calling it "absolutely false" and noting that return rates have been in line with or better than the company's internal expectations.
BlackBerry noted today that Detwiler Fenton refused to give the company its report or explain its methodology for determining return rates.
Anne Buckley, Detwiler Fenton general counsel and chief compliance officer, said today in a statement that the firm is confident in its research methodology and welcomes any regulatory inquiry.
"Detwiler Fenton is not the only research provider publishing similar reports regarding customer reactions, sales, and returns of the BlackBerry Z10," she said. She added that neither the research analyst nor any office or director at Detwiler Fenton has any financial interest in BlackBerry.
BlackBerry today reiterated that sales of the Z10 are meeting expectations and that data from retail and carrier partners shows customers are "satisfied" with the device.
"Return rate statistics show that we are at or below our forecasts and right in line with the industry," Chief Executive Thorsten Heins said in a statement. "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 performance of the Z10 is critical to the company's comeback plans, as it represents the first of a new generation of BlackBerry devices. The company has put a lot of resources behind the Z10 in hopes that the device will help put BlackBerry back in the game.
Waiting in the wings is the BlackBerry
BlackBerry reported that it had shipped 1 million Z10 phones to its partners in the last quarter, but that didn't include U.S. sales, which began late last month. All eyes will be on BlackBerry's next earnings report for a more accurate tally of the Z10's performance.
Updated at 8:10 a.m. PT with comment from Detwiler Fenton.