Verizon Wireless sold out of much (all?) of its initial stock of new BlackBerry Storm smartphones, and now only promises to ship new Web orders “by 12/15.” This is potentially bad news for RIM (RIMM), which is at risk of missing its subscriber growth numbers for Q3, ending Nov. 29, because many new Storm subscribers won’t activate their subscriptions until Q4.
So… why the delay?
One observer’s theory, now denied by RIM and Verizon: That the first batch of Storms shipped with a bad version of its software, and needed to be modified at the last minute. We’re told by both RIM and Verizon that’s false, and that there are no issues with the devices.
So… why the delay? We don’t know, and Verizon declined to elaborate.
It’s possible that Verizon and RIM were both caught off guard with initial demand, which was pretty strong. (Some longish lines, but nothing like iPhone day.) Research Capital analyst Nick Agostino estimates that Verizon sold 250,000-400,000 Storms on Friday, according to Barron’s.
That could have wiped out Verizon (VZ) stores’ initial inventories and put a back-log in their mail-order fulfillment. Which could explain the multi-week delay in shipments for new orders.
But if so, sounds like someone screwed up somewhere. Verizon has been promoting the Storm nonstop for weeks with Internet and TV ads. RIM has been working on the Storm for months, and has been expecting a massive Christmas.
Obviously there was going to be a lot of demand for Storms between now and the end of the year. Surely Verizon knew they’d have to order a lot of Storms. Surely RIM knew they’d have to build a lot of Storms.
So where are they? Did Verizon order too few? Can RIM not build them fast enough? Was RIM’s fleet sacked by Somali pirates?
The next month is crucial. If RIM can produce Storms as fast as Verizon and Vodafone (VOD) can sell them, it’ll should be news for all companies involved. If they can’t, and delays continue, both companies lose a huge weapon in their war with Apple’s (AAPL) iPhone and its exclusive carrier, AT&T (T). Not good.
We look forward to hearing RIM’s explanation during their Q3 earnings presentation in a few weeks. Meanwhile, have a better explanation? Drop us a line at [email protected] or via our anonymous tips form. We promise to keep all correspondence confidential and anonymous.
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