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BlackBerry Z10 Launches but Concerns Remain

NEW YORK ( TheStreet) -- BlackBerry (BBRY - Get Report) is set to launch the Z10 smartphone in the U.S. on Friday, but it's doing so amid an increasingly crowded market. That market's not going to get any less crowded, either.

In a research note, Raymond James analyst Tavis McCourt said BlackBerry is seeing some positive data on initial demand for the BlackBerry 10 platform, especially in light of some recent data points, but that competition is increasing, and fast.

Samsung recently announced its new Galaxy S 4 phone, running Google's (GOOG - Get Report) Android operating system to enormous buzz. There are rumors that Apple (AAPL - Get Report) is going to launch the iPhone 5S this summer, and there are other new offerings out there as well. That doesn't bode well for BlackBerry as the newest entry into the market.

"We believe BBRY's launch in the strategically important US market will run into intense competition as Samsung, Apple, HTC and Nokia refresh their line-ups," McCourt wrote in the note.

Earlier this month, BlackBerry announced an "established partner" purchased 1 million BlackBerry 10 devices, with shipments to start immediately.

CEO Thorsten Heins also recently said that sales of the BlackBerry 10 set a record for its launch day in Canada, up 50% from other launches. Sales in the U.K. were also exceptionally strong, with three times the best performance ever for a first week. But BlackBerry is now entering the top smartphone market in the world, the U.S., and that may prove to be a different beast altogether.

The Z10 is slated to launch on AT&T (T - Get Report), with Verizon (VZ - Get Report) carrying it as of March 28. Sprint (S) is not carrying the Z10. BlackBerry's keyboard phone, the Q10, will launch in June, so not having the phone available immediately on the three major carriers is a hindrance.

That's a tough nut to crack, as users of the iPhone and Galaxy, the two most dominant phones in the U.S., are essentially the same. A research note from Consumer Intelligence Partners shows that iPhone and Galaxy S III users spend similar amounts of time on their phone for calling, texting, email, and Internet access. It's going to be tough to port users from these platforms, though CEO Heins has said BlackBerry is seeing some defectors, but no concrete material was given.
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