Wall Street Daily

Make-or-Break for BlackBerry, As New Z10 Smartphone Hits the U.S. Market

We’re guessing the level of angst at BlackBerry’s (BBRY) headquarters in Waterloo, Ontario is off the charts right now.

Having watched Apple (AAPL), Google (GOOG) and Samsung blow by them in the smartphone market, BlackBerry arguably faces the most important week in its history, as the company battles to become relevant again.

Following countless hours of design work and testing, the attempted comeback began at a synchronized, multi-city event two months ago, when BlackBerry finally unveiled its answer to the iPhone and Samsung’s Galaxy smartphones. Drum roll, please…

The new BB10 operating platform and new devices, including the Z10 smartphone.

Since then, BlackBerry has embarked on a massive marketing campaign – the biggest in its history, according to Bloomberg. You may have caught the company’s Super Bowl ad and a new blitz over the past few days, including during the NCAA basketball tournament.

The Z10 went on sale in overseas markets one month ago – and reports indicate that sales have been brisk so far.

Whether BlackBerry can crack the U.S. market, however, is an entirely different matter.

The extent of BlackBerry’s collapse means it has a daunting task ahead. Having once dominated the U.S. smartphone world, it now holds a measly 6% market share, according to comScore. By contrast, Apple and Google have a stranglehold on the market, boasting a combined 90% share.

But BlackBerry’s long-awaited comeback is underway…

The Z10 Goes Stateside

At a kickoff event in New York last Thursday evening, BlackBerry officially launched the Z10 in the United States.

AT&T (T) and Best Buy (BBY) then started selling the phone on Friday. Verizon (VZ) will follow suit this Thursday. T-Mobile will also offer the Z10 (as a T-Mobile customer, the company has already hit me with e-mails about it). But if you’re a Sprint (S) user, you’re out of luck for now. America’s third-largest carrier is sitting out the Z10 launch.

Make no mistake, this is do-or-die time for BlackBerry.

Strategy Analytics’ Director of Mobility, Kevin Burden, tells Reuters: “You can’t underscore the significance of how important the U.S. market is to BlackBerry. It holds about 20% of the overall BlackBerry subscriber population. When it comes to BlackBerry devices, no other market has adopted BlackBerries with the same ferocity as the U.S. market.”

The question is: Will Americans adopt the new BlackBerry with that same ferocity?

The early signs are encouraging…

Bullish on BlackBerry

Strategy Analytics estimates that BlackBerry’s first weekend Z10 sales will hit 300,000 units – and says that with good initial reviews of the BB10 platform and pent-up demand from BlackBerry loyalists, the company is on track to meet that target.

But what about investors?

You don’t need me to tell you that BlackBerry shares have got crushed over the past few years. But since hitting a 52-week low of $6.22 at the end of September 2012, the stock has surged by 128% to a current price of $14.23.

And Morgan Stanley (MS) is particularly bullish on the stock from here, slapping a $22 price target on it. Another 54% jump – yeah, I’d say that’s bullish!

We may get a better idea of BlackBerry’s sales figures and future prospects very soon. As if the Z10 launch weren’t enough for this week, the company reports its quarterly earnings on Thursday.

Ahead of the tape,

Martin Denholm