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BlackBerry seeing one-third of BB10 users switch over from other platforms

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BARCELONA, Spain--BlackBerry (NASDAQ:BBRY) is seeing one-third of new BlackBerry 10 device sales coming from customers who are switching to the platform from other smartphone operating systems, a higher figure than the company had anticipated, according to a senior company executive.

Though he declined to provide exact sales figures, Rick Costanzo, Blackberry's executive vice president of global sales, said early sales of the BlackBerry Z10, the company's first BlackBerry 10 device, are exceeding expectations. "No one is declaring victory by any stretch of the imagination, but gosh, we're off to a great start," he said in an interview here with FierceWireless at the Mobile World Congress trade show. He also said calls to customer care for the Z10 are lower than BlackBerry or its operator partners expected.

"The other thing that kind of surprises us, is that of the sales we're getting, the percentage that are actually flipping over from other platforms onto BlackBerry 10 is a lot higher than we expected," he said. "We're actually getting roughly speaking about a third coming in from outside the BlackBerry community."  He said that figure is "consistent" across the 50 markets BlackBerry has launched the Z10 in thus far.

Blackberry executives have said they are pleased with the momentum they are seeing from the launch of the touchscreen Z10 and are excited about the release of the Q10, the company's first BB10 phone with a physical keyboard. The company will need that momentum to get it out of its market share slump. According to Gartner, BlackBerry captured 3.5 percent of the global smartphone market in the fourth quarter, down from 8.8 percent in the year-ago period. Similarly, research firm comScore found that BlackBerry captured 6.4 percent of the U.S. market in December 2012, down from 8.4 percent in September 2012.

Costanzo said sales have been strong so far for a few main reasons. One is that he said there is "fatigue" among users who have grown tired of the user interface of Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS and are drawn to BB10's gesture-based user interface. Another is that users who may have switched from BlackBerry to other platforms in recent years are coming back into the fold, he said, and are pleased to see the strides the company has made to improve its web browser and multimedia capabilities while also focusing on core BlackBerry attributes such as messaging and security. 

BlackBerry's Z10 will launch in the United States in mid-March, but the company has not given an exact date for when the Q10 will launch, though CEO Thorsten Heins indicated earlier this month that the Q10 may launch in the U.S. market eight to 10 weeks after the U.S. launch of the Z10. 

Costanzo said the company's marketing message for the United States will focus on certain applications that it is not emphasizing as much in other markets, but that the core marketing message will remain the same as in other parts of the world. "The key messaging in terms of BlackBerry keeps you moving forward, it empowers success, it allows you to drive success however you define it, whether it's in a business context or a personal context, is pretty global."

Costanzo also confirmed that BlackBerry will release BB10 devices at different segments of the market at a range of price points. However, he said BlackBerry will continue to sell legacy BlackBerry 7 devices for the low end of the market since BB10, like many new platforms, is aimed right now at the higher end of the market. He also said he was comfortable that BlackBerry could migrate customers from lower-end BlackBerry devices to BB10 devices because it's already starting to happen in emerging markets.

"Do I believe there's a short-term imperative in terms of doing that [to introduce BlackBerry10 devices at lower price points]? No, I don't," he said. "We think we sit very, very comfortably with the portfolio that  we have right now. I think Z10 is resonating not only for existing BlackBerry customers but for new Blackberry customers as well."

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