The report, issued on Thursday by Detwiler Fenton Company in Boston, said that BlackBerry’s new Z10 phone is being returned by shoppers at an above-average rate. In a statement on Friday, BlackBerry called the analysis “false and misleading” and suggested that it was an attempt to manipulate the company’s share price. Furthermore, it said it would ask the Securities and Exchange Commission to investigate the report.
“These materially false and misleading comments about device return rates in the United States harm BlackBerry and our shareholders,” Steven E. Zipperstein, the company’s chief legal officer, said in a statement. “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.”
The company did not offer any information to substantiate Mr. Zipperstein’s suggestion that the report was knowingly false and a deliberate attempt at stock manipulation. Adam Emery, a spokesman for BlackBerry, declined to elaborate.
Anne Buckley, the general counsel and chief compliance officer at Detwiler Fenton, said that the investment house stood by its findings.
“We are confident in our research methodology and we welcome any regulatory inquiry,” she said in a statement. “Detwiler Fenton is not the only research provider publishing similar reports regarding customer reactions, sales and returns of the BlackBerry Z10.”
The statement added that neither the analyst nor any officer or director of the firm held any financial interest in BlackBerry.
The report at the center of the dispute varied from other skeptical assessments of BlackBerry in claiming that dissatisfied Z10 owners are returning the phones in large numbers.
“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,” it said. Ms. Buckley did not respond to questions about how some retailers experienced more returns than sales.
The report said that the firm was told by retailers that the returns were largely prompted by the “unintuitive nature of the user interface, the maps app and the lack of apps — issues that become apparent once consumers have had several days to use the device.”
But Thorsten Heins, the president and chief executive of BlackBerry, which is based in Waterloo, Ontario, and still legally known as Research in Motion, said that the company’s research indicated that the vast majority of buyers were satisfied with the phone and that the Z10’s return rate was similar to that of other phones and below the level forecast by BlackBerry.
“To suggest otherwise is either a gross misreading of the data or a willful manipulation,” Mr. Heins said.
The S.E.C. declined to comment. BlackBerry also plans to request an investigation by the Ontario Securities Commission, although Detwiler Fenton is not registered to conduct business in that province.
Thomas A. Sporkin, a lawyer in Washington who was previously a senior enforcement official at the S.E.C., said that before starting an investigation, the regulator would need evidence, perhaps from an insider, that Detwiler Fenton was knowingly deceptive or that it benefited in some way by publishing a false and negative report.
“It sounds a little weak from the allegations we know to take away resources for an investigation,” he said.
Article source: http://www.nytimes.com/2013/04/13/business/global/blackberry-disputes-report-on-z10-phone.html?partner=rss&emc=rss
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