BlackBerry (NASDAQ:BBRY) just can’t catch a break, it seems, as shares sold off on Thursday following a report from analyst group Detwiler Fenton & Co. that suggested several major U.S. retailers are reporting a significant increase in returns for the new Z10, one in the new lineup of smartphones on which the company is pinning its future viability.
In some cases, Detwiler Fenton said returns have even exceeding sales. Complaints reportedly range from the maps feature, lack of apps, and the user interface — all inherent problems with the new BlackBerry 10 operating system rather than the hardware itself, which means BlackBerry’s other new phones will probably have the same issue, if people are buying them at all.
BlackBerry shares started to hemorrhage in early morning trading following the analyst warnings, and closed the day down 7.76 percent.
“The U.S. launch of the Z10 started poorly and weakened significantly as the days passed,” Joseph Fersedi, an analyst at ITG Investment Research, told clients in a note today, citing information from independent dealers. Analysts at Detwiler Fenton said the main complaint about the new user interface was that it wasn’t intuitive enough.
However, a spokesperson for BlackBerry says, “speculation that there have been abnormally high levels of returns of BlackBerry Z10 devices” is “absolutely false.”
“Our data shows that return rates for BlackBerry Z10 devices both in the U.S. and on a global basis are in line with or better than our expectations and are consistent with return rates for other premium smartphones in the market today,” said Patti McKague, Senior Manager of Public Relations for BlackBerry.
The Canadian smartphone maker is relying on the touch-screen Z10, its first to use the BlackBerry 10 platform, to help reinvigorate the brand, which has seen its market share whittled away by Apple (NASDAQ:AAPL), Samsung (SSNLF.PK), and other smartphone manufacturers using Google’s (NASDAQ:GOOG) Android platform.