Feature John Chen BlackBerry CEO

In August, I suggested that BlackBerry wind down its hardware phone business. So long as revenue grew in enterprise software, the company may transition its growth prospects outside of smartphones. Unfortunately for BlackBerry fans, there is some truth to this possibility, but only a bit.

BlackBerry reported another big drop in hardware sales. Revenue from hardware was 41 per cent of total. The company recognized just 800,000 units at an ‘ASP’ (or average selling price) of USD $240. This means either the company is offering steep discounts to carriers, or that the Z3, Z30, and the Leap were the top sellers.

Another disappointing trend for BlackBerry was software sales. Though it was the only segment to grow, it was not big enough to offset the winding down of revenue it earned from SAF (service access fees) from old BlackBerry devices. There is hope. The company acquired Good Technology, which will consolidate the MDM space and boost profitability.

One monumental shift the company is taking is embracing the Android operating system. The “Slider” aka “Venice,” will have the final, albeit awkward, name of “Priv.” The target market is to businesses and consumers who value a physical keyboard and privacy.

Having personally used the Passport device for just a week, I believe there is a market for Priv. Provided BlackBerry markets effectively and targets bloggers, journalists, writers, content creators, and business users, it could sell at least 500,000 units in the first month, and over 1 million units in the quarter.

Former BlackBerry users who missed the keyboard will value it on the Priv. The Passport is an excellent device, too. When it was launched, it had at least 250,000 in pre-orders. Unfortunately, the unpopularity of the brand, the stronger interest for the Android OS and all those apps, hurt BlackBerry. Still, the Passport is a delight to use. Having updated from the Z10, BlackBerry, refined the first time help on the device and improved the stability of the OS.
Photo from BlackBerry
Photo from BlackBerry.

Passport’s physical keyboard is invaluable. These are the things the keyboard has:

  1. Long hold to get capital letter (i.e. A, B, C)
  2. Left swipe on keyboard to delete word
  3. Up-swipe below suggested word to enter
  4. On browsers or apps, use the keyboard for navigation and zooming in and out
  5. On-board keyboard complements physical one, easily accessible above keyboard

For Priv, which will be released later this year, BlackBerry is outfitting the device with good specs:

Size: 5.4 inches
Resolution: 1440 x 2560 pixels (~544 ppi pixel density)
Curved edge screen
OS: Android OS, v5.1.1 (Lollipop)
Chipset: Qualcomm MSM8992 Snapdragon 808
CPU: Dual-core 1.8 GHz Cortex-A57 & quad-core 1.44 GHz Cortex-A53
GPU: Adreno 418
Internal:32 GB, 3 GB RAM
Card slot: microSD, up to 128 GB

Note: the Samsung Galaxy refreshed devices do not have a microSD.

The company may do a few things to ensure its success:

  1. With approval from Google, BlackBerry should add the BBOS10 functionality. This includes very basic things like playing youtube, audio, and music even when screen is turned off.
  2. Have the option of running HUB and accessible from a quick keyboard key
  3. Priced competitively. Past new devices started at $599 – $699. BlackBerry should charge no more than $500 – $575 CDN (USD $400). The latest Nexus 5 is close to $520 CDN. The keyboard “premium” should not cost more than $50 – $100.
  4. Provide early leaks and videos demonstrating the value of the keyboard
  5. Have a roadmap for a Passport Android and Classic Android.

Chen is focused on profitability per unit, but Priv will not sell well in its first quarter if it is buggy, is slow to get Android OS updates, and has no character like HUB, swipe to wake, etc., coming from BBOS10.


Related Download
Five Key Issues for DNS: The Next Network Management Challenge Sponsor: F5 Networks
Five Key Issues for DNS: The Next Network Management Challenge
Download this whitepaper to learn the five issues that IT needs to think about around DNS and why, as well as how you can build a strong DNS foundation to maximize use of resources, secure DNS, and increase service management, while remaining agile.
Register Now