The fascinating feud between BlackBerry and some analysts that broke out at the end of last week raises some interesting questions on both sides of the fence about how product sales numbers are counted and estimated.
If you missed it, the battle started with a story in the Wall Street Journal on Thursday about how returns of the new Z10 were outnumbering sales. “We believe key retail partners have seen a significant increase in Z10 returns to the point where, in several cases, returns are now exceeding sales, a phenomenon we have never seen before,” wrote Detwiler Fenton analyst Jeff Johnston.
That really ticked BlackBerry off, with the company taking the unusual step of requesting a regulatory review of the analysis by the Securities Exchange Commission and the Ontario Securities Commission.
“The data we have collected from our retail and carrier partners demonstrates that customers are satisfied with their devices,” said chief executive Thorsten Heins in a statement. “To suggest otherwise is either a gross misreading of the data or a willful manipulation.”
The company maintains that sales of the Z10 are going as expected. The key device only recently launched in the United States and its performance there will go a long way to determining the future of BlackBerry. Even more important will be the pending launch of the Q10 device, which has the physical keyboard that many BlackBerry loyalists have been holding out for.
The disagreement over the Z10’s performance highlights some fallacies in how both companies and analysts come to their assessments. On the corporate side, there are plenty of examples of exaggerations, over-reporting and embellishments.
I wrote about one such situation last week, with the controversy over how many Surface tablets Microsoft has really sold. The constant sellouts of Google’s Nexus 4 phone last year also looked to be the result of relatively few units being manufactured. In both cases, it wasn’t hard for the companies involved to claim that their products were popular or meeting their own internal expectations because they were in fact selling out.
So what kind of projections does BlackBerry have for the Z10? Realistically, no one outside the company has any way of knowing.
In the absence of such information, analysts often refer to less-than-scientific methods to come to their own conclusions. Some visit malls to gauge lineups, some make calls to stores while others base their advice on their own personal experiences. In some ways, they’re not unlike journalist reviewers – without hard data, sometimes anecdotes just have to do.
But is there a difference in the effect that reviewers and analysts have, and therefore the responsibility they hold? A reviewer’s negative opinion on a product can hurt its sales, but an analyst’s can hurt the company’s stock. BlackBerry has had more than its share of negative reviews, so its decision to go after an analyst as opposed to any journalist shows the company takes the latter more seriously than the former.
BlackBerry’s decision to counter-attack Detwiler Fenton reminds me of Elon Musk’s similar move against the New York Times, which published a scathing review of his Tesla electric car earlier this year. Both cases are examples of companies not willing to idly take criticisms that they deem to have make-it-or-break-it power.
I’m all for these sorts of skirmishes breaking out. No journalist or analyst ever willfully wants to be at the heart of such a controversy, but such situations generally do have a way of shaking out some truth one way or the other.
In that vein, it’s a safe bet that we’ll soon be seeing some more numbers – and therefore more scrutiny – that will give us a better idea of just how well, or poorly, BlackBerry is really doing.