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BlackBerry CEO John Chen says his company will release two new less expensive 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 (pictured), which BlackBerry targeted at enterprise customers, might have been priced too high at about $700, Chen said in an April 7 article in The National. About 600,000 BlackBerry smartphones of all models were sold by the company in the first quarter of 2016, which is significantly lower than the 850,000 total units that analysts predicted would be sold in the quarter. Chen would not break down how many Priv sales were part of those sales. The Priv is BlackBerry’s first-ever Android-powered handset.
“The fact that we came out with a high-end phone [as our first Android device] was probably not as wise as it should have been,” Chen told The National in an interview. “A lot of enterprise customers have said to us, ‘I want to buy your phone but $700 is a little too steep for me. I’m more interested in a $400 device.'”
Based on that feedback from customers, the company will now introduce two lower-priced Android smartphones to try to appeal to customers who want BlackBerry devices and security along with lower price tags, the article reported. One of the two new midrange Android handsets will feature a physical keyboard and the other will include a full touch-screen display. No release dates have yet been announced.
Earlier in April, BlackBerry dropped the price of its Priv smartphone to $649, a $50 cut from its previous price, as it tries to increase sales of the device, which features both a touch-screen and a slide-out physical QWERTY keyboard, according to an earlier eWEEK story.
The Priv features a 5.4-inch curved glass display, a 1.8GHz Qualcomm Snapdragon 808 hexa-core processor and 3GB of RAM. It also includes an 18-megapixel rear-facing camera with a special Schneider-Kreuznach lens and dual flash, a front-facing 5MP camera, 32GB of on-board storage, a microSD slot that accepts cards up to 2TB for expanded storage and a 3,410mAh battery. The handset runs on Android 5.1, and its display is covered with protective Corning Gorilla Glass 4.
A key focus of the Priv smartphone is its inclusion of high-end enterprise security features that have been found in BlackBerry devices for years. Even the name of the phone is an abbreviation of the word “privacy.” The Priv is built on a new platform, called DTEK, which warns users if they are being spied upon, according to an earlier eWEEK report. DTEK is a warning system built into an app that will help users determine which apps are accessing their private data.
BlackBerry announced the Priv in September 2015 in hopes that it would help the company reclaim some hardware market share that it lost to Android phones and Apple’s iPhones.
BlackBerry, which had stood fast with its own operating system for its products for years, made a huge shift by releasing an Android phone, but was eventually forced to try something new to remain relevant as a smartphone maker.
Earlier in April, BlackBerry reported that its fiscal 2016 fourth-quarter GAAP revenue dropped to $464 million from $660 million a year earlier. For the period, BlackBerry posted a net loss of $238 million, compared with net income of $28 million one year prior. For the full year ending Feb. 29, 2016, BlackBerry reported GAAP revenue of $2.2 billion, down 35 percent from the $3.34 billion it reported one year ago. The GAAP revenue reflected a purchase accounting write-down of deferred revenue associated with recent acquisitions. The company reported a loss of 45 cents per share for the fourth quarter, compared with earnings of 5 cents per share a year earlier.
Worse for the company was that its reported fourth-quarter revenue of $464 million was $99 million lower than the $563.1 million expected by a survey of Thomson Reuters financial analysts.
BlackBerry to Aim 2 Smartphones at Midrange Buyers to Spur Sales
BlackBerry’s business has been changing in the marketplace as Chen continues to transform the company into a security software firm to find new revenue growth as its hardware business continues to shrink. He has said in the past that if the company’s smartphones don’t succeed on their own that he would be willing to drop its hardware lines and focus on software to keep the company in business.
In March Facebook announced that it will drop support for its stand-alone app for the BlackBerry 10 operating system due to the platform’s small market share, according to an earlier eWEEK story. Facebook users will still be able to access the app on BlackBerry devices using a Web browser or a Web Wrapper app. Facebook’s decision came about three weeks after WhatsApp, also owned by Facebook, announced that it will end support for BlackBerry, Nokia S40, Nokia Symbian S60, Android 2.2 and 2.1, and Windows Phone 7.1 mobile operating systems by the end of 2016 as the user bases for the platforms continued to shrink.
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.