Barcelona: BlackBerry unveiled a new, cheaper touchscreen
smartphone and a "classic" model with a keyboard on Tuesday, as it tries
to stem losses and win back once-devoted security-conscious business
and government users.
The news, coupled with more details about the company's strategy
in its services business, helped send shares in BlackBerry surging more
than 9 percent.
The lower-end Z3 smartphone, priced at under $200, is being built
under a partnership deal with FIH Mobile, the Hong Kong-listed unit of
Taiwanese electronics company Foxconn Technology Co Ltd.
BlackBerry also announced the Q20
smartphone that features BlackBerry's patented QWERTY keyboard design.
It has a 3.5-inch touchscreen, the largest display yet on a QWERTY
BlackBerry smartphone.
Code named Jakarta, the device will go on sale in April in Indonesia,
where BlackBerry's BBM messaging service is proving very popular, said
John Chen, who took over as the group's chief executive late last year.
"It's a 3G phone, and we have a plan to expand the phone to
different parts of southeast Asia after Indonesia," he said at the
annual Mobile World Congress trade fair in Barcelona. "We have a plan to
go global with an LTE (high speed 4G) version of it some time in the
future."
BlackBerry, once a must-have device for every business executive
and government official because of its pioneering secure email service,
has haemorrhaged market share to Apple Inc's iPhone and rival devices
running on Google Inc's Android software.
Opening its admired BBM messaging service to other operating
systems - with Microsoft Corp's Windows Phone being the latest addition -
has further hit BlackBerry sales, particularly in emerging markets.
Research group IDC put BlackBerry's share of the smartphone market in
the fourth quarter of 2013 at just 0.6 per cent, down 77 per cent from a
year ago.
Back to the future
Chen appeared on stage with Foxconn Chairman Terry Gou,
reflecting a burgeoning relationship that is set to deepen as the
Taiwanese company manufactures the new, high-end "classic" BlackBerry.
The Q20, available before the end of the year, will have a
traditional BlackBerry layout, aimed squarely at the company's original
core business and government customers, Chen said.
The reintroduction of Blackberry's traditional keyboard was at the top of customers' wish list, he said.
The line of keys that included the 'Menu,' 'Back,' 'Send' and
'End' buttons, along with a trackpad, had been dropped on its high-end
Q10 keyboard device that was launched last year.
The lack of the familiar keys, coupled with the device's all new
BlackBerry 10 operating system, had left many long time fans
disenchanted with the Q10 device.
Enterprise strategy
Chen's strategy is to focus more on its profitable services
segment that helps its large government and corporate clients manage and
secure mobile devices on their internal networks.
Admitting the company had spread itself "a little too thin," he
said it would focus on the 30 per cent of the enterprise market where
the strength of BlackBerry's operating system in terms of security
played best - regulated industries like banking and telecommunications,
and government.
"We don't want to lose the rest of the market ... but for the
next 18 months I think you see us very much intent on going back and
winning the regulated industries," he said.
He also unveiled changes to the company's mobile device
management tool for companies and government in Barcelona, taking prices
lower with the aim of winning back some of the market share lost to
competitors.
Although the announcements helped boost BlackBerry shares about
10 percent to $10.78 on Nasdaq at mid-afternoon, some analysts remain
skeptical about whether the company can turn around in its fortunes.
"In our view, BlackBerry has yet to prove that it can stabilize
its subscriber base and cost structure, before establishing a baseline
profit level and new path to growth," GMP Securities analyst Deepak
Kaushal said in a research note.
Foxconn partnership
Despite shifting the focus away from its money losing handset
business, Chen has indicated that the segment remains a core asset for
the company.
The price of BlackBerry's devices, while competitive, reflect the company's security credentials, he said.
"We need to build very solid phones that are more skewed toward
the high-end," he said. "We are not going to play 'let's build a $75
phone.' That's not our sweet spot."
BlackBerry signed a 5-year deal last year with contract Foxconn,
in which it would no longer pay upfront for parts used in its devices.
Instead, Foxconn, the trading name of Hon Hai Precision Industry, will
take a share of profits on each device in return for taking on inventory
management.
The partnership also gives Foxconn a step up in the value chain -
a chance to not just assemble smartphones, but help to develop and
design them as well