BlackBerry Drops Classic Phone, U.S. Senate Drops BlackBerry Phones

By Todd R. Weiss  |  Posted 2016-07-05 Print this article Print
BlackBerry classic phone drop

The dropping of the BlackBerry Classic phone and the pending end of BlackBerry phone distribution by the Senate IT department are being seen by several IT analysts as more evidence of the company's changing role in the global smartphone market.

BlackBerry's global market share has fallen from 11 percent in 20122 to 0.2 percent so far in 2016, Tuong Nguyen, an analyst with Gartner, told eWEEK. "I don't think you even need to be in the industry to evaluate that," he said. "Is this the last nail? Maybe. Maybe not. I want to say it's the end of an era, but that era ended a long time ago."

Charles King, principal analyst with Pund-IT, wrote in an email reply to an inquiry that the Senate's move to stop distributing the company's devices is "obviously a blow to BlackBerry. For years now, the company has enjoyed the reputation of having the market's most secure smart phones. The fact that the Senate is dropping BlackBerry and allowing members to use Android and iOS devices means that one of the company's few remaining value propositions is no longer unique."

Devoted users of the company's Classic smartphone will likely "moan and groan with disappointment," said King, though the company "could take a hit if the decision leads to mass defections."

Another analyst, Rob Enderle of Enderle Group, told eWEEK that the Senate's move lets BlackBerry devotees in the government continue to use their devices while the IT staff can get out of the business of supplying new BlackBerry devices in favor of Android and iOS handsets in the future.

"Blackberry largely pivoted away from phones to providing security and management across devices some time ago," said Enderle. "Blackberry's latest phone, the PRIV, is an Android device and, I expect, that'll be their direction going forward. So they'll still be in the hunt for devices but their focus in now on securing and managing the entire class. This decision reflects that change in focus as much as it does a need to get out of the phone supply business."

BlackBerry's fall from dominating the enterprise smartphone market has been swift and stunning. In early 2006, before the first iPhones appeared from Apple, half of all smartphones sold were BlackBerry models. By 2009, though, its share of the global smartphone market was down to 20 percent. The company continues to face growing competition from Apple, Samsung, Google and others.

The company has been having a tough time financially for some time as well. In late June, BlackBerry reported a net loss of $670 million for the first quarter of fiscal year 2017, which is up from a net loss of $238 million in the fourth quarter. The company's GAAP revenue was $400 million, while its non-GAAP revenue was $424 million for the first quarter. 

In April, BlackBerry announced that it will be unveiling two new lower-priced Android smartphone models later in 2016 in an effort to win back customers and increase sales after its flagship, high-end Android Priv phone failed to catch on with buyers as much as the company had hoped. The Priv, which BlackBerry targeted at enterprise customers, might have been priced too high at about $700 when it debuted in September 2015. Earlier in April, BlackBerry dropped the price of the Priv to $649 as it tried to increase sales of the device, which features both a touch-screen and a slide-out physical QWERTY keyboard.


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