Investors Abandon Blackberry After 'Disappointing' Launch
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Blackberry's weak U.S. launch of its Z10 smartphone shows the company still doesn't have what it takes to compete with other smartphone makers such as Apple and Samsung, said Jim Suva, an analyst for Citigroup, on CNBC's "Squawk on the Street" on Monday.
(Read More: Blackberry Z10 Can't Compete With Apple, Android: Analyst )
"We find the initial launch to be disappointing," Suva said. "The stock has really been going up. It's been up 25 percent year-to-date and a lot of hype around this product for turning around this company, and we have found in the handset company that it's extremely difficult to make a return comeback product because of the competitive nature keeps getting more and more fierce."
Blackberry has not officially released sales numbers for the new device. But its launch on Friday was followed by a downgrade on Monday from Goldman Sachs, which cut its price target to $17, and downgraded it to "neutral" from a "buy" rating. The firm said lack of marketing for the device, and bad positioning of the product in stores contributed to a weak launch.
US Launch Disappoints
Citigroup's Suva—who has a "sell" rating on the stock with a price target of $6—said that while the roll-out of the device in Canada and Europe was good, its core market, the U.S., did not have a successful launch.
"The launch in Europe and Canada were quite stellar. Lots of promotions, lots of carrier support behind it, and we're just not seeing that here in their core market in the United States, which is unfortunate," Suva said. "So many investors were coming into this expecting much better sell-through, much better promotions and it's simply turning out to be not what was expected."
Blackberry's stock was down more than four percent in afternoon trading.
Citigroup has had a "sell" rating on Blackberry for many years, and although the stock has had a 25 percent increase year-over-year, the firm feels it is positioned correctly for the long-term, Suva said.
"We expect the company to continue to lose market share and to continue to generate losses, that's the combination, simply put," Suva said.
