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BlackBerry is dropping the production of its Classic QWERTY keyboard-equipped smartphone just a few days after the U.S. Senate unveiled its plans to stop offering BlackBerry phones to members after its existing supplies of the company’s handsets are distributed.
The moves, though unrelated, could offer more support for the widely held industry beliefs that BlackBerry is continuing on a road map that will see it become a mobile security software company in place of its former position as a powerhouse in the enterprise smartphone market just 10 years ago.
The dropping of the BlackBerry Classic handset (pictured) was unveiled by Ralph Pini, the company’s chief operating officer and the general manager for devices, in a July 5 post on The BlackBerry Blog.
“Sometimes it can be very tough to let go,” wrote Pini, as he described changes the company is making in its phone lineup. “For BlackBerry, and more importantly for our customers, the hardest part in letting go is accepting that change makes way for new and better experiences.”
As the company prepares to issue several new handset models, it is dropping its BlackBerry Classic, which debuted in December 2014 with a trademark QWERTY keyboard and a 3.5-inch touch-screen display. “For many years, Classic (and its BBOS predecessors) has been in our portfolio,” which has made it an “incredible workhorse device for customers, exceeding all expectations,” wrote Pini. “But, the Classic has long surpassed the average lifespan for a smartphone in today’s market. We are ready for this change so we can give our customers something better—entrenched in our legacy in security and pedigree in making the most productive smartphones.”
The company will continue to support the BlackBerry 10 operating system for customers as well as its expanding Android offerings, a company spokesperson told eWEEK in a July 5 reply to an email inquiry about the move. “We are focused on software updates for BlackBerry 10, with version 10.3.3 scheduled for next month, and a second update to follow next year,” the spokesperson wrote.
Only the BlackBerry Classic smartphone is being discontinued, the spokeswoman added. “Similar to many other device makers, we are changing the lineup of smartphones as we innovate and advance our portfolio,” she added. “We continue to actively support sales of our BlackBerry 10 smartphones to customers in most markets. And for customers choosing our Android device as their next smartphone, there will be a seamless transition without any compromise to the security of their mobile platform or operations. “
The move by the U.S. Senate to discontinue the distribution of BlackBerry smartphones to its members and staffers when its existing supplies are gone came in recent days through a memo revealed by Politico. The memo from the Senate’s mobile communications office said that the BlackBerry devices on the list, which included the Z30, the Classic, the Passport, the Z10 and the Q10 from either AT&T or Verizon are being “discontinued” by the device maker, which is being denied by BlackBerry. Only the Classic is being dropped, the company insisted, despite the memo.
In addition, the Senate mobile communications team is not dropping support for BlackBerry devices, but only the availability of new devices when the current supplies of about 600 devices are used up, according to a spokesperson for the office. Similar notices are “sent to the Senate community any time a product used in our environment is discontinued or is in limited supply,” the spokesperson wrote. “The Senate is not phasing out BlackBerrys. BlackBerry still supports and will continue to support our devices and the OS10 platform on which they operate.”
Any future BlackBerry products will be evaluated by the agency to determine if they would be useful for the Senate, the spokesperson continued. Senate users will still have a choice of Android or Apple iPhone smartphone models.
BlackBerry Drops Classic Phone, U.S. Senate Drops BlackBerry Phones
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.