Finally confirming rumors about BlackBerry’s pending Android smartphone, the company announced on Sept. 24 that it will be selling a new privacy-targeted Android-equipped smartphone in the coming months as it works to reclaim some of its lost hardware market share.
The new phone, called the Priv, is “named after BlackBerry’s heritage and core mission of protecting our customers’ privacy,” CEO and Executive Chairman John Chen said during the company’s second-quarter 2016 earnings call. “Priv combines the best of BlackBerry security and productivity with the expansive mobile application ecosystem available on the Android platform.”
There have been rumors about a BlackBerry Android phone since June, when reports began circulating that the company would unveil an enterprise-aimed device with a sliding keyboard like some smartphones from the past. BlackBerry, which has stood fast with its own operating system for its products for years, is making a huge shift by releasing an Android phone, but it is in a position of having to try something new to remain relevant as a smartphone maker.
Several IT analysts told eWEEK that the move is not completely unexpected, but that it marks what could be the end of the line for the company’s hardware business in the future.
“BlackBerry is doing something Nokia briefly tried—switching to Android as an OS for its hardware,” said Avi Greengart, an analyst with Current Analysis. “While the vertical QWERTY slider form factor is intriguing, this looks like the end of BlackBerry’s long line of phones” as the company struggles to counter difficulties in getting developers to write apps for BlackBerry’s OS10 devices. “If the foray into building fortified Android smartphones is not an immediate success, it is hard to see the company continuing to invest in building phones at all.”
Charles King, principal analyst for Pund-IT, told eWEEK that the Priv Android smartphone could potentially be BlackBerry’s last-ever phone, or that it is certainly getting to the point where the end of the hardware line could happen. “The company’s core customer base continues to shrink so it badly needs a popular alternative,” said King. “Absent Apple licensing iOS to third parties, Android is the best possibility.”
At the same time, it could be risky for BlackBerry to abandon its hardware roots, he said. “BlackBerry is best-experienced, known and understood as a handset maker; so jumping too far afield would be difficult and dangerous. Then again, desperate times often require desperate moves.”
The Priv phone is a worthwhile attempt by the company to see if it can recapture some of its past hardware successes, said King. “I wouldn’t say it’s over for BlackBerry, but they need to offer customers new alternatives and also branch out into new areas that leverage their core competencies. The success and market penetration of Android make it the best option for BlackBerry to accomplish that.”
Rob Enderle, principal analyst with the Enderle Group, said BlackBerry’s Priv “is what they need to do to stay in handsets. They’ve just lost too much critical mass in apps for BlackBerry 10 not to explore other options for a wider handset market than a security-only line can address.”
For enterprise buyers, an Android phone from the company could be a major attraction, said Enderle. “Were I buying for an enterprise, given the security risk on Android and iOS, it would be very hard not to spec the BlackBerry Android phone as the only one I’d want in my shop,” he said. “I think they can and should stay with phones; the market needs a vendor who is security-first, given the security exposures in the segment. Their departure from this market would put a lot of government agencies, health care organizations and other security-focused industries at an unacceptable level of risk.”
What BlackBerry’s Android Phone Could Mean for Its Hardware Business
Jan Dawson, chief analyst of Jackdaw Research, told eWEEK that “the big question is whether BlackBerry can really turn handsets around at this point, or whether it’s simply too late for the brand, which has been tarnished by all that has happened over the last few years.”
Dawson said his sense is “that many users have moved on at this point, and that even if enterprises like the Android platform, employees won’t. The reality is that there are still some industries where BlackBerry devices are the only option, and therefore, I think it’s likely that Blackberry will continue to make devices for some time to come, but the question is whether that can ever be a profitable business for them again.”
Ken Dulaney, an analyst with Gartner, said that although he has not yet seen a new Priv handset, he’s disappointed with its sliding keyboard form factor, which he called awkward to hold and use based on past experiences. A touch-screen keyboard found on most phones today has become a natural feature for almost all users, he said.
“It’s an artificial compromise where BlackBerry is trying to use its strength in keyboards somehow to make themselves differentiated from other Android phones,” said Dulaney. “What they should do is just a straight touch-screen and then put in all the great BlackBerry security features.”
If the company did that, it would be better than phones from other vendors, he said. “It’s almost as if they tried too hard here.”
The Priv announcement was a highlight on a day when the company posted fiscal 2016 second-quarter non-GAAP revenue of $491 million, down 47 percent from $916 million in the same quarter a year earlier. For the latest quarter, which ended Aug. 29, BlackBerry reported a non-GAAP loss of $66 million after adjustments, which resulted in a loss of 13 cents per share.