BlackBerry (NASDAQ:BBRY) is betting big on the Priv, its new smartphone that runs a modified version of Google's (NASDAQ: GOOG) Android platform. However, analysts are skeptical about whether the security-focused phone can help deliver a hit for BlackBerry and keep the company's hardware business afloat.
The Priv includes a slide-out keyboard.
The Priv will retail for $699 unlocked. AT&T Mobility (NYSE: T) will sell the phone on Nov. 6 for $250 with a two-year contract or for 30 monthly payments of $24.67. The unlocked version of the phone will work on T-Mobile US' (NYSE:TMUS) LTE network but BlackBerry has not said if it will partner with Verizon Wireless (NYSE: VZ), Sprint (NYSE: S) or U.S. Cellular (NYSE:USM).
As The Wall Street Journal notes, the Priv is in some cases more than $100 cheaper than prices for Samsung's Galaxy S6 Edge and Galaxy S6 Edge + phones, while it sits between the $649 price for the Apple (NASDAQ: AAPL) iPhone 6s and the $749 price point of the iPhone 6s Plus.
BlackBerry COO Marty Beard declined to comment to the Journal on whether any other carriers will sell the phone but said the company plans to announce new distribution agreements in the near future.
BlackBerry CEO John Chen said in October the company would consider getting out of the smartphone business in a year if it's not making money selling phones. Chen told The Verge that he aims to sell 5 million smartphones a year, which will be the level the company needs to make the handset business profitable. In its most recent fiscal quarter, BlackBerry recognized revenue on just 800,000 devices in the quarter, or a third of the number from a year ago.
The Priv sports a 5.4-inch dual-curved screen, a slide-out Qwerty keyboard, 18-megapixel camera and a battery life that promises 22.5 hours of continuous use. To set the Priv apart from other Android phones, BlackBerry has put special software on the phone, including new encryption technology and an alert system to tell users when social-media apps are tracking their locations. BlackBerry also says customers can easily monitor the security level of their phone and know what apps access their microphone, location, camera and other personal information.
"Everything is focused on reclaiming or grabbing the space we feel like we should own, which is privacy and security," Beard told Re/code.
In order to pull the trigger on the Priv, Beard told Re/code that BlackBerry had to be convinced it could make money off the phone and that it could make a device that was both unique and truly secure even though it ran Android. BlackBerry feels confident it has done so, but the question is whether it can convince consumers.
Beard said that pre-orders for the Priv have exceeded any of BlackBerry's other recent device launches but he did not provide specific numbers.
"Relative to Passport, Classic and Leap, and [over the] same time frame, this is magnitudes better than those launches," he said, adding that for the first time in a long time BlackBerry could have more demand than supply for a product. "I'm a little worried about making sure I have enough," Beard said. "It's a good problem to have."
Beard said BlackBerry will aggressively market the Priv, giving it a far larger marketing budget than other recent launches, including the Classic and Passport, which run on the BlackBerry 10 operating system.
The Priv might wind up being BlackBerry's last smartphone. "Perhaps there's something else in the pipeline, but this device does seem like a last stand," Morningstar Investment Services analyst Brian Colello told Bloomberg. "We've seen new products come out for the last couple years, BlackBerry's trying to get a hit with any form factor, any price point and now it's with a different operating system."
If the Priv sells better than Classic and Passport, it may keep the phone business going, BGC Financial Colin Gillis told Bloomberg. "It doesn't take a lot of phones to really move the needle for this company," he said.
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Re/code article
- see this CNET article
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