In some ways, I would love this if it were true. According to estimates I've done, it's likely BlackBerry's losing money every time it sells a BB7 or PlayBook tablet device. The sooner the company can exhaust its inventory and shift the world to BB10s, the better.
However, it's hard for even a BlackBerry bull like me to see the Z10s going from 1 million to 4 million units in the quarter. I think the number will surprise the BlackBerry bears, but I think it's more likely to expect something in the range of 2.5 to 3 million Z10s.
But let's assume that SocGen is right. The analysts say the Z10 Average Selling Price (ASP) is $500 (which is probably right), and the Q10 goes for an ASP of $550 (also believable). They think the BB7s go for an ASP of $200. Put it all together with their numbers and you get to device revenues of $2.7 billion. Figure then that BlackBerry service revenue slightly declines (in the single digits) and you have to add another $900 million of revenue. You're now at $3.6 billion. Add in some software sales, and you get to their $3.7 billion revenue numbers.
However, what's most puzzling to me is that, if SocGen is correct, BlackBerry will suddenly shift from selling a bunch of low-margin phones where it loses money, to highly profitable phones in addition to service revenues with close to 90% gross margins.
Yet, with the extra billion dollars of revenue from the Z10s, SocGen thinks EPS from BlackBerry will only move from SocGen's old target of $0.00 to 6 cents a share. I just don't understand that -- unless the analysts think there's going to be much more exorbitant marketing costs than they previously expected.
The good news here in this report for BlackBerry bulls is that SocGen is probably right that the U.K. is a good test for the company's results elsewhere. And it does appear that there is stabilization there for BlackBerry. Now, the company just needs to see some actual growth.