BlackBerry Hopes To Bolster Hardware Line With Android-Powered Smartphone

BlackBerry Friday lifted the curtain on a new security-based, Android-powered smartphone, called Priv, to strengthen its struggling hardware portfolio.

The new smartphone "combines the best of BlackBerry security and productivity with the expansive mobile application ecosystem available on the Android platform," said CEO John Chen on a call with investors.

The smartphone, which Chen said will hit the market by the end of 2015, will be sold in stores and online. A BlackBerry spokesperson did not immediately respond to an inquiry about whether the device will be sold through the channel.

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While no more details about Priv were revealed, the smartphone is rumored to have a curved screen, similar to the Samsung Galaxy S6 Edge, as well as a slide-out QWERTY keyboard and 18-megapixel camera, according to the Wall Street Journal.

The announcement of BlackBerry's new smartphone comes as the Waterloo, Ontario-based company reported disappointing results for its second quarter ended Aug. 29. BlackBerry posted a loss of 13 cents per share on a revenue of $490 million, below analysts' expectations of 9 cents per share on a revenue of $600 million. BlackBerry shares fell 3 percent premarket on Friday.

"It's challenging for channel partners when we’re not sure what BlackBerry’s focus is on any given month -- growing as a hardware or software business," said Robby Hill, founder and CEO of HillSouth, a Florence, S.C.-based BlackBerry partner. "The Android announcement -- finally breaking their hardware business into a new operating system -- remains to be seen if it should be successful. Obviously, BlackBerry has the channel relationships in place to perform as a mobile hardware and software provider."

"The software partnerships announced this year are really innovative but have yet to fully mature into products. Certainly there is time to execute, and it's good to see the management owning up to challenges and addressing them head-on," he added.

Jay Gordon, vice president of sales at Plano, Texas-based BlackBerry partner Enterprise Mobile, said BlackBerry continues to reinvent itself as an enterprise mobile management company through new software and services, but part of the company is still based in consumer-targeted products.

"As a partner, we more commonly see migration away from BlackBerry products and services to more mainstream and consumer-focused options," said Gordon. "While we continue to maintain and provide expertise and know-how on the BlackBerry platform, it is not an overly impactful part of our business today."

Priv is BlackBerry's latest device in a string of products released over the past year, including the high-end 3.5-inch screened BlackBerry Classic, the 5-inch $275 enterprise-focused midrange BlackBerry Leap and the 4.5-inch screened BlackBerry Passport.

Software and services continued to be a bright spot for BlackBerry, with revenue of $74 million, up from $62 million posted the same quarter a year ago. BlackBerry has developed improvements over its device-management software, BES12, through acquisitions of companies like Good Technology.

"We continue to sit and wait to see how BlackBerry reinvents itself," said Gordon.

"The recent acquisition of Good remains top of mind in terms of how they will leverage new resources and capability to the benefit of customers and partners," he added. "They have a unique opportunity to transition their company to an enterprise mobile management organization, however, execution is key due to being so far behind other giants in the space, including Apple, Samsung, Microsoft, VMWare and Citrix."

PUBLISHED SEPT. 25, 2015