BlackBerry to focus on enterprise, releases 2 mid-range phones, the Z3 and Q20

BARCELONA, Spain--BlackBerry (NASDAQ:BBRY) CEO John Chen officially unveiled the company's next two smartphones, a mid-range touchscreen phone called the Z3 and another mid-tier phone with a physical Qwerty keyboard called the Q20.

BlackBerry CEO John Chen, left, and Foxconn Chairman Terry Gou with the forthcoming Z3 smartphone. 

Chen made the announcements at a press briefing here at the Mobile World Congress trade show in which he described his vision for turning around the beleaguered company. Chen made the case that BlackBerry's focus on the enterprise services business, new devices (especially made in partnership with Foxconn), BlackBerry Messenger and its QNX platform for M2M will help revive the firm's fortunes.

The Z3 will have a 5-inch screen, run the latest BlackBerry 10 OS, version 10.2.1, and will be made by Foxconn. Chen did not provide many other details but said the phone will a have a retail, unsubsidized price of under $200. The phone will make its debut in April in Indonesia. The phone will run on 3G networks but BlackBerry is planning a global LTE version.  

The Q20, which Chen affectionately referred to as "the Classic," will return BlackBerry to its hardware design roots, and will sport hard buttons as well as an integrated trackpad. The device will have a 3.5-inch touchscreen and keyboard with frets and sculpted keys. Chen said the device will come out in the second half of 2014, but did not give a price. He joked that it will also be made by Foxconn "unless they price it too high."

Chen noted the company is working on premium smartphones as well. "We do have a few high-end devices that we are working on, but I am unable to show you and share with you right now," he said.

Beyond the gadgets, Chen and John Sims, the president of the company's Global Enterprise Services business, also heavily emphasized that BlackBerry's enterprise services business will drive growth. Sims said BlackBerry envisions enabling both horizontal and vertical enterprise applications, including for markets such as financial services and healthcare via its BlackBerry Enterprise Service.

"BES is the foundation of that strategy," Sims said. "That platform is the foundation and we build out from there."    

To that end, BlackBerry said the next BES, BES 12, will come out before the end of the year, at around the same time the Q20 is introduced. For the first time, in addition to Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS devices, BES 12 will also support Microsoft's  (NASDAQ:MSFT) Windows Phone. The BES 12 platform will offer backward and future compatibility, unifying BES 10 and BES 5 on to one platform.

To help spur adoption of BES 12, BlackBerry launched an "EZ Pass" program, which will let customers move from BES and other mobile device management platforms to BES 10. For existing BlackBerry customers, the EZ Pass program will match any active existing on-premise BES license and any active license customers may have from other MDM vendors with a corresponding Silver BES 10 perpetual license, though terms and conditions apply. Customers will also receive free Advantage level technical support with their new license.

Chen said BlackBerry has heard from its enterprise customers and is also simplifying its BES pricing and licensing structure. The Silver tier includes full device, application, email and security management for BlackBerry, iOS and Android devices, including BlackBerry Balance, which separates personal and work data on BlackBerry 10 smartphones. The Gold tier adds BlackBerry's Secure Work Space containerization solution for iOS and Android, and advanced BlackBerry 10 management and security features for security-focused customers in the government, financial services and healthcare industries. Customers can get an annual subscription or a perpetual license. In the case of subscription, Silver service is $19 per user per year and Gold is $60 per user per year. Chen said the new pricing would make BlackBerry competitive with other MDM providers.

A day after BlackBerry announced that its Blackberry Messenger service will be coming to Windows Phone and Nokia (NYSE:NOK) X customers in the coming months, BlackBerry unveiled eBBM Suite. The suit is a new family of products and services that work with BlackBerry smartphones and BES and BES 10 to provide enterprise-class mobile messaging. BBM Protected will be the first solution in the program, and that solution will provide encrypted enterprise messaging and also know track of conversations for companies that must deal with regulatory compliance issues.

Chen said he was still contemplating bringing core BlackBerry features to other smartphone platforms, but said he had nothing new to announce. "It's still in our thinking," he said. "I will be a little aggressive if I tell you there's a plan. I have started some discussions with various other platform people. I'd love to do it." However, he said BlackBerry has other priorities, including executing its enterprise strategy.

Chen said there is some truth to the idea that BlackBerry's focus in the last few years on the consumer smartphone market hurt its enterprise customers. He said the company had been "spread a little too thin. We didn't have enough resources to be spread that thin."

BlackBerry is also focused on bringing QNX to more devices outside the automotive market, where it has a strong position, Chen said. However, he said the company will need to partner with others to grow that business.

Chen said the company will be break-even in its cash flow in this fiscal year and be profitable in its next fiscal year if it is successful with its current activities. 

In other news, Don Lindsay, BlackBerry's vice president of user experience since 2009, left the company in January, according to the Wall Street Journal, which cited an unnamed person familiar with the matter.

Lindsay had been in charge of software design, especially for BlackBerry 10. Lindsay was also a key player in the company's 2010 acquisition of The Astonishing Tribe, a Swedish startup that developed the user interface at the heart of BB10. A BlackBerry spokeswoman confirmed Lindsay's departure, according to the Journal.

For more:
- see this release
- see this Globe and Mail article
- see this Fox Business article
- see this WSJ article (sub. req.)

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