BlackBerry is ‘ditching’ premium smartphones for mid-range devices

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Two new budget BlackBerry devices coming as John Chen rails against Android-powered Priv and calls time on BB10 operating system

BlackBerry CEO John Chen has said the company may have made a mistake in releasing its Android-powered Priv smartphone, suggesting the device was too high-end for most of its customers, and that the company would be retiring its BB10 operating software.

Speaking to Saudi Arabian newspaper The National, Chen also revealed that BlackBerry would be launching two mid-range Android handsets this year, one with a physical keyboard and one with a full touchscreen. He declined to say when the new devices would go on sale.

Released last October, the Priv, BlackBerry’s first Android device, received largely positive reviews, but so far this has failed to translate into strong sales.

Priv5-600x1023 BlackBerryThe company announced last week that it had sold just 600,000 handsets across its range during the three months to the end of March, well below analyst forecasts of 850,000.

Chen claims that this was down to the Priv being “too high-end a product”, and that the enterprise target customers for the device were put off by the handset’s price tag.

The fact that we came out with a high end phone [as our first Android device] was probably not as wise as it should have been,” Chen is quoting as saying, although he declined to reveal specific sales figures for the Priv.

A lot of enterprise customers have said to us, ‘I want to buy your phone but $700 is a little too steep for me. I’m more interested in a $400 device’.”

However, Chen claimed that BlackBerry could still play a role in the business smartphone market, saying that the company still had much to offer enterprise consumers, particularly when it comes to security.

We’re the only people who really secure Android, taking the security features of BlackBerry that everyone knows us for and making them more reachable for the market,” he told the paper.

Since taking charge of BlackBerry, Chen’s recovery strategy has focused on providing services like mobile device management, instant messaging and security to businesses, and in recent months, it has made major acquisitions in the form of Good Technology and UK-based firm Encription.

john-chen-blackberry-leadChen added that the company’s handset division had shown some signs of improvement during the last quarter, with losses halving compared with the previous quarter, and that BlackBerry would only exit the segment if it could not achieve profitability.

Since I started at the company [in November 2013] I’ve been saying I’ll make the handset business profitable,” he said.

If I can’t make it profitable because the market won’t let me, then I’ll get out of the handset business….I love our handset business, but we need to make money.”

And any future handsets will feature a new operating system, as Chen also confirmed that while BlackBerry would continue to release updates for BB10, there were no plans to launch new devices running the operating system.