BlackBerry Ltd (BB.TO)(BBRY.O) launched its third Android-based phone on Tuesday, the last device whose success will be the company’s financial responsibility, opting to price its top-end device well below Apple Inc’s (AAPL.O) iPhone 7.
The Canadian smartphone pioneer, which has lost most of the market to Apple and others, last month said it planned to completely outsource the development of its smartphones to focus on its more profitable business of making software and managing mobile devices. That means the Android-based DTEK60 will be the last phone for which BlackBerry buys components itself, which carries a heavier risk if it does not sell well.
“This one is our phone,” BlackBerry Chief Operating Officer Marty Beard said in an interview. “This is fully our responsibility.” BlackBerry’s Toronto-listed shares were down 1.2 per cent in afternoon trade at C$9.70. They had touched C$11.18 ─ their highest since January ─ on Sept. 28 when the company announced its outsourcing plan.
“BlackBerry had to kill its hardware in order to save it,” website TechCrunch wrote in a broadly positive review of the DTEK60 that nevertheless questioned how much interest it would elicit.
Waterloo, Ontario-based BlackBerry does not have any deals with telecom companies to distribute the device. Instead, it is pitching the phone directly to companies and governments, as well as selling it on its own websites in the United States, Canada, and several major European countries.
“It’s not necessarily an anti-carrier strategy,” Beard said. “It’s more that we see this as the most efficient and most cost-effective way to get to that customer base.”
The device, which has a 5.5 inch touchscreen, will be priced at $499. Apple’s iPhone 7 with the same screen size starts at $769, while the equivalent version of Android-maker Alphabet Inc’s (GOOGL.O) Pixel starts at $649.
“Certainly it’s not going to be the next superstar in the marketplace,” said William Stofega, a mobile phone analyst at IDC Corp. “But it’s a solid device that brings some really high-end security features and capabilities to it.”
The DTEK60 is being manufactured by TCL Corp (000100.SZ), a Chinese electronics company that makes phones as well as televisions, air conditioners and other household appliances. BlackBerry launched its first Android device, the high-end Priv, in November last year and followed it with the much cheaper DTEK50 in July. The company last month wrote down $137 million of phone inventory and supply commitments.