BlackBerry Has to Crack Android’s Code

26 Sep 2015 | Author: | No comments yet »

BlackBerry CEO Says Worst Is Over After Posting Wider Loss.

BlackBerry Ltd. After much speculation and hopes that BlackBerry would release an Android phone, the struggling business device maker finally caved to the pressure on Friday, announcing a new smartphone that runs on Google’s app-friendly operating system instead of BlackBerry’s increasingly obsolete software.Blackberry Ltd. confirmed rumors on Friday that it would start making phones using Google’s Android software, at the same time that it reported another quarter of disappointing earnings. Chief Executive Officer John Chen said the company has found the low-point of its turnaround after second-quarter revenue plummeted and smartphone shipments hit their lowest since at least 2007.

BlackBerry BBRY -7.47% CEO John Chen explained in a CNBC op-ed why he had ultimately decided to make the Android smartphone, called Priv, after long insisting that the company was “committed” to its own operating system. “For those restraining excitement until rumors became reality — the day has come,” Chen wrote in the article, acknowledging that some people would react “to this news with surprise.” He explained, “Priv will be the answer for former BlackBerry users who miss the physical keyboard but needed apps.” Chen emphasized the security protections with Google’s GOOG -1.87% Android platform, writing that “in today’s hectic world, where cyber threats are real for everyone…Priv will be the solution for smartphone users who are learning daily of the lack of privacy they have on their current devices.” But BlackBerry will not abandon its legacy operating system entirely: “I want to be clear: fans of BlackBerry’s workhorse BlackBerry 10 smartphones can continue to depend on us,” Chen said, citing “continued demand” for its older “flagship” products. “They’re not going away.” And to the many observers who declared BlackBerry nearly dead long ago, he stressed that the reports of its death have been greatly exaggerated, expressing optimism in its new strategy: For nearly two years now, I’ve been telling you how we would transform the iconic BlackBerry brand into a true software powerhouse. The BlackBerry Priv will implement grsecurity for some added peace of mind, as well as BlackBerry Safeguard, which should keep all data and information safe and secure.

The shares slumped as much as 8.1 percent after the Waterloo, Ontario-based company reported a wider loss than analysts anticipated in the period ended Aug. 29. The move is seen by analysts as a last-ditch attempt to revive its deeply depressed smartphone business by riding the coattails of the most popular smartphone operating system, Android. Chen reiterated to investors he’ll bring in $500 million in software revenue by March 2016 and vowed to stabilize shrinking device sales with the help of a new phone, called the “Priv,” that runs Google Inc.’s Android operating system. The chief executive has been working to transform BlackBerry from the shrinking smartphone maker he inherited two years ago into a leading provider of security software for businesses. By changing operating systems, Chen is betting that combining BlackBerry’s reputation for security with Android’s huge market will stop losses from BlackBerry’s device division and allow the company to focus more on developing its software products.

BlackBerry shipped 800,000 phones in the quarter, the lowest in at least eight years, according to data gathered by Bloomberg. “The device business, I would say, is not dead yet but in bad shape. Eight hundred thousand units is really nothing,” said John Butler, senior handsets analyst at Bloomberg Intelligence. “If that effort proves successful and the devices resonate with the core customer base they’ve always gone after, which is government and enterprise, then what’s the rational for sticking with a proprietary operating system with no apps?,” he said.

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