RIM to provide glimpse into how Z10 is selling

TORONTO (AP) -- Research In Motion Ltd. will provide a glimpse of how it's critically important new BlackBerry is selling when it releases fiscal fourth-quarter results before markets open on Thursday.

WHAT TO WATCH FOR: How well the Z10 touchscreen smartphone is selling in Canada and internationally. Details on the U.S. launch won't be part of the financial results until the next earnings report because the Z10 just went on sale in the U.S. last week.

Analysts are expecting RIM to announce around 1 million Z10 phones sold for the fourth quarter.

"It was probably fine," Morgan Stanley analyst Ehud Gelblum said. "It probably won't be a blowout, but the way they have been talking I'd be shocked if it wasn't anecdotally bullish."

Colin Gillis, an analyst with BGC Financial, expects that an above consensus estimate of 1.3 million Z10 units shipped. Gillis believes demand will fall off quickly and said that might not be seen until RIM's next earnings report or the one after. He notes store checks reveal a lack of marketing support and poor positioning by U.S. carrier AT&T.

"It's sad," Gillis said. "They are way off in the corner with the iPhone 4."

WHY IT MATTERS: The BlackBerry, pioneered in 1999, had been the dominant smartphone for on-the-go business people and other consumers before the iPhone debuted in 2007 and showed that phones can handle much more than email and phone calls.

The new BlackBerry Z10 has received favorable reviews since its release in February in Canada and elsewhere, but the launch in the critical U.S. market was delayed until late this month. A new keyboard BlackBerry, called the Q10, won't be released in the U.S. for two or three more months. The delay in selling the new keypad BlackBerry complicates RIM's efforts to hang on to customers tempted by the iPhone and a range of devices running Google Inc.'s Android operating system. Even as the BlackBerry has fallen behind rivals in recent years, many users have stayed loyal because they prefer a physical keyboard over the touchscreen on the iPhone and most Android devices.

Gelblum said RIM can survive as a niche player. He believes the Canadian company doesn't have to approach the numbers Apple has with the iPhone. He notes the iPhone has a 21 percent smartphone market share. "There is going to be a billion smartphones sold this year. A five percent market share would be 50 million sold, that's 12 million a quarter. If they are selling 12 million a quarter they are doing back flips," Gelblum said.

WHAT'S EXPECTED: Analysts polled by FactSet forecast a fourth-quarter loss of 31 cents per share on revenue of $2.85 billion.

LAST YEAR'S QUARTER: RIM said it lost $125 million, or 24 cents a share, on revenue of $4.2 billion.