Chen recently had to deal with something that a BlackBerry boss has not had to manage for a long time: a product shortage. The BlackBerry Passport, albeit it on a much smaller scale than the company had grown used to in its halcyon days, is a hit.
The Passport sold out in six hours on BlackBerry’s website and soon after on Amazon. The device pre-sold 200,000 units in the first two days. Of course that’s a fraction of the 10-million iPhone 6’s and 6 Plus’s that Apple sold in its first weekend, but it’s a number BlackBerry will take in its fight to be relevant once again.
Chen told Bloomberg the issue was a positive sign.
“I’m glad to have inventory issues. It shows that people want the phone,” he said. “We took a very conservative approach and didn’t order too many.”
It’s probable that Chen’s explanation is true, especially given the reception to BlackBerry Q10 and Z10 launch. But it’s at least as likely that Chen, unlike his predecessor Thorsten Heins, knows the value of a lineup.
Apple is famous for its complex and sophisticated inventory management system, but the company has always basked in the free publicity of a lineup around its stores on launch day. CEO Tim Cook has been called out for the seeming incongruity of these two facts. As far back as 2010 analysts were wondering why Apple product launches always played out the same.
Piper Jaffray analyst Gene Munster posed the question directly to Cook, who was then COO. Was the company was intentionally running out of product?
“We do not purposely create a shortage for buzz,” replied Cook, who offered that the company was simply “caught offguard” by the demand.
So did BlackBerry intentionally limit supply of the Passport? Canaccord Genuity analyst Mike Walkley thinks that, perhaps unlike Cook, Chen was legitimately caught offguard.
“I think BlackBerry overestimated demand so much for the BB10 devices that they have very conservative estimates for new devices going forward,” he told eWeek recently. “The company is still working through some BB10 devices in the channel from more than 6 months ago. Also, to conserve cash flow and meet year-end cash flow break even targets, BlackBerry has taken a more cautious stance on building new inventory for devices.”
With the upcoming launch of the BlackBerry Classic, a phone that combines some of the things BlackBerry loyalists were missing with the company’s new operating system, it will be interesting to watch the demand and supply dynamic, and if Chen has come to appreciate the marketing dollars he isn’t spending by nurturing a little free buzz.
