BlackBerry readies Passport smartphone for $599 without subsidies

BlackBerry (NASDAQ:BBRY) plans to formally unveil its newest smartphone, the Passport, on Sept. 24 and will sell it for $599 in the U.S. without subsidies, according to CEO John Chen. The phone's launch is scheduled to come just ahead of the release of BlackBerry's earnings, scheduled for Sept. 26. The company is releasing the gadget as it tries to consolidate the gains it has made under Chen in turning around its business.

The Passport will be the first global launch of a new BlackBerry phone since the company's BlackBerry 10 devices flopped in the first half of 2013. Chen told the Wall Street Journal the Passport will be priced differently in other countries based on taxes and tariffs.

By contrast, Apple's (NASDAQ: AAPL) iPhone 6 starts at $649 for the 16 GB model without a contract, while the iPhone 6 Plus costs $749 without a contract. Samsung Electronics' Galaxy S5 smartphone went on sale in the U.S. earlier this year for $650 without a contract. BlackBerry is clearly looking to get the Passport to jumpstart enterprise device sales; according to research firm IDC, BlackBerry commanded just 0.5 percent of the global smartphone market in the second quarter.

The Passport has a 4.5-inch square screen, which Chen said would appeal to users who care a great deal about productivity, such as those working in the medical field. The Passport's physical keyboard is touch sensitive, allowing users to use the keyboard to scroll through content on the screen above it.

BlackBerry Passport

The Passport launch will come ahead of the firm's launch of BlackBerry Enterprise Service 12 in November, which, unlike BES 10, will work with older BlackBerry models. Both BES 12 and BES 10 also support phones running iOS and Android. BlackBerry is aiming to make the BES 12 release a major launch as it seeks to win back enterprise customers.

Chen said in an internal memo in August that BlackBerry had finished its three-year-long restructuring efforts, and was ready to begin hiring new employees and making strategic acquisitions. "The reason why our focus is so enterprise is because what we know how to do is security and productivity" he told the Journal. "Security, cybersecurity, personal identity protection. This is going to be a big deal." 

Chen said BlackBerry hasn't gained much ground in Asia, with the exception of Malaysia and Indonesia. "I think there's a tremendous amount of opportunity in both Southeast and North Asia," he said, without saying how the company plans to address these markets. "Next year the focus has got to be on growth," Chen added. "Growth comes from vertical products. Better phones, newer technology."

Chen has been trying to stanch the company's cash burn, and in June BlackBerry reported a surprise quarterly profit and Chen reiterated his target of achieving break-even cash flow in 2015. He also got the company to achieve its cost-cutting target a quarter ahead of schedule.

Over the past few months BlackBerry has made a few small acquisitions to bolster its position in security and enterprise services. In July the company bought Secusmart, which supplies voice and data encryption and anti-eavesdropping solutions for government organizations, and earlier this month BlackBerry acquired Movirtu, which provides a virtual identity solution for carriers that allows multiple phone numbers to be active on a single device.

For more:
- see these two separate WSJ articles (sub. req.)

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