BlackBerry calls for review by US and Canadian authorities to debunk claims of high Z10 return rates

BlackBerry is refuting claims that its new Z10 smartphone is experiencing high customer return rates by seeking a review from both the Securities and Exchange Commission in the US and Ontario Securities Commission in Canada.

Thorsten Heins, CEO of BlackBerry, reiterated that sales of the Z10 were “meeting expectations,” and that any data supplied by its retail or carrier partners had shown that customers were “satisfied” with the smartphone.

It follows a report written by Jeff Johnston, an analyst at Detwiler Fenton, who told the Wall Street Journal that in several areas customer returns were now higher than Z10 smartphone 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,” Johnston said.

Joe Fersedi, an analyst for ITG, backed some of these concerns in a separate report, claiming that the Z10 launch “started poorly and weakened significantly as the days passed.”

He later added that the proportion of sales attributed to the Z10 had fallen from 4 percent to 1 percent at Verizon stores. The same was also true of AT&T stores, Fersedi claimed, dropping from 7 percent to 2 percent.

Heins has lashed out against these findings, but admitted that return rate statistics for the device were “at or below” company forecasts, despite being in line with industry expectations.

“To suggest otherwise is either a gross misreading of the data or a willful manipulation,” he said. “Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged.”

BlackBerry says Detwiler Fenton has refused to hand over its original report, or to explain its methodology. Verizon is said to have also refuted the claims surrounding high customer return rates.

Steve Zipperstein, Chief Legal Officer for BlackBerry, said it would be presenting its formal request for a review to the Securities and Exchange Commission and Ontario Securities Commission “in the next several days.”

“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,” he said.

“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.”

BlackBerry’s anger is somewhat understandable. The BlackBerry Z10 smartphone is its new flagship product and carrying the flag for its revamped mobile operating system single-handedly. Well, at least until the Q10 comes along anyway.

The company announced that it had shipped 1 million units last month, but substantial sales figures are yet to be disclosed. High return rates, if proven, could seriously damage the company’s ability to compete not only with iOS and Android, but also the so-called “third pillar” platforms such as Windows Phone, Firefox OS and Tizen.

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