BlackBerry Ltd. played up the nostalgia with its new Classic smartphone — bringing back popular features such as the row of navigation keys and trackpad — but analysts say with a steep price point and limited distribution during the Christmas season, it’s unclear whether the throwback will be enough to lure back corporate customers.
At a launch event Wednesday in New York, BlackBerry executives drew many comparisons between the Classic and the Bold 9900 — which many see as the Waterloo, Ont.-based technology firm’s last big smartphone hit.
The device — the first to be developed entirely under chief executive John Chen’s supervision — was the result of feedback while meeting with customers, he said.
“A lot of them pulled out their BlackBerry… the 9900s or the Curve, and they told me, ‘Don’t mess around with this’,” said Mr. Chen on stage at Cipriani in the heart of Manhattan’s financial district.
Wednesday’s launch was a move to steer BlackBerry back toward its core “CrackBerry” constituency, after Mr. Chen’s predecessors — Thorsten Heins, Jim Balsillie and Mike Lazaridis — chased competitors with attempts at an all-touch screen Z10, a Playbook tablet, and the Torch (and its hideaway keyboard).
What you see, the product… everything you know about BlackBerry has been upgraded
However, Mr. Chen was keen to point out that beyond some familiar features, the Classic was a revamp of its former incarnations.
“What you see, the product… everything you know about BlackBerry has been upgraded,” Mr. Chen said.
The device will cost US$449 in the United States and $499 in Canada. It will be distributed by AT&T, Verizon in the U.S., as well as Rogers Communications, BCE Inc., Telus Corp., and Wind Mobile.
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Rogers and Telus are offering the device at $49 and $50, respectively, both with a two-year contract.
Vodafone will carry the device in Germany, followed by Telefonica and Telekom in January. In the U.K., it will be available at Selfridges stores and O2. In France, Orange, FNAC and Colette will have it in January.
Ehud Gelblum, analyst at Citi Research in New York, said the steep unsubsidized price could make corporate customers reluctant to upgrade, particularly when Bold and Curve devices with similar functions can be obtained for much cheaper through a carrier.
And if the Classic’s capabilities and software can convince customers to upgrade, it will eat away at BlackBerry’s base of customers using older devices — and the high-margin service revenue they generate, Mr. Gelblum added.
The back of the BlackBerry Classic smartphone.
“It’s a really nice phone, versus what you can get right now for free, if that’s the functionality you want,” he said. “It’s hard to see how it’s going to do much more than cannibalize that existing Bold and Curve base… Does it grow the base? It’s hard to see that right now.”
Another obstacle is timing: it will be available in Canadian stores and with Vodafone in Germany before the crucial Christmas shopping season, but customers in the U.S. and in Europe will largely have to wait until January. By that point, many consumers may be eyeing the new devices coming out of Mobile World Congress in March, Mr. Gelblum said.
Mr. Chen would not give details Wednesday ahead of Friday’s earnings release about the amount of Classic pre-orders it has received, but said it is getting better reception than the square-screened Passport.
That phablet-sized keyboard enabled handset garnered 200,000 in pre-orders on launch day.
The Classic will likely be BlackBerry’s most popular enterprise device and help cash flow, but broader distribution is still needed, said Maynard Um, analyst at Wells Fargo in New York in a note to clients on Wednesday.
BlackBerry was once coveted by carriers, but as it lost market share to iOS and Android-based phones, its sway has lessened.
“There is a strong renewed interest with the key carriers around the world to work with BlackBerry. But I would agree, it’s not without challenges… Things are getting better and will continue to get better,” Mr. Chen said.
Source:: National Post
