BlackBerry Classic aimed squarely at loyalists
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Dec 15, 2014  |  Vote 0    0

BlackBerry Classic aimed squarely at loyalists

The Classic harkens back to the popular BlackBerry Bold series with its navigation buttons at the top of the physical keyboard but boasts a larger screen and a much more powerful operating system

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BlackBerry is bringing back the familiar with its Classic smartphone but an earnings report Friday will remind investors just how much the ground has shifted for the Waterloo-based device maker.

Shares in BlackBerry hit their lowest level since mid-October on Monday in advance of the earnings and product launch Wednesday in Manhattan, Frankfurt and Singapore, with analysts forecasting steep service revenue losses on tumbling subscriber numbers.

“We continue to see headaches for the services business,” Credit Suisse said in a note.

BlackBerry is looking to boost falling revenues with the Classic amid reports of pre-order sellouts at its online store in the U.S., albeit from a limited supply. The Classic is priced at a mid-range $449 (U.S.) without a contract.

It harkens back to the popular BlackBerry Bold series with its navigation buttons at the top of the physical keyboard but features a larger 3.5-inch square swipe display and a powerful BB 10.3.1 operating system for faster browsing and better overall performance.

It is expected to include an 8MP camera for photos and a 2MP front-facing camera, enhanced battery life and new features geared to enterprise users. BlackBerry has also announced the re-release of its popular Brick Breaker game on the Classic.

And the company has boosted business apps through BlackBerry World and Android games and business apps through the Amazon Appstore.

At a briefing last week a BlackBerry executive compared the Classic, which follows release of BlackBerry’s all-touch Z10, to Coca-Cola’s return to the original formula for its soft drink after negative public reaction to a reworking of the product.

Chief executive John Chen in a blog wrote said the principle is, “if it ain’t broke don’t fix it.

“You don’t reinvent yourself every day. You take what you learned yesterday and sharpen it today,” Chen wrote. “We are committed to earning your business — or earning it back.”

The company is banking on the device along with its wide-bodied Passport handset to repatriate loyalists and attract new users to help Chen deliver on his promise to bring BlackBerry back to break even.

“The market share that they have left, it’s full of users who would really love a classic BlackBerry product,” tech industry analyst Jeff Kagan said in an email. He suggested the device could be a winner, at least with legacy BlackBerry customers.

But JP Morgan analysts note that while opportunities for BlackBerry in the mobile enterprise market are huge given its reputation for offering secure devices that promote productivity, so are the risks.

Once a leading global mobile brand BlackBerry is now facing a host of low-cost rivals in developing markets including emerging Chinese hardware companies — along with a new enterprise focus from companies including Apple.

BlackBerry has tried to build buzz for the Classic with a crowd-sourced mosaic and other social media campaigns in addition to more traditional advertising and is reworking it hardware distribution strategy after the disappointing performance of the Z10 and Q10 in the U.S.

The company, which has fallen from best global brands rankings, lacks the comprehensive sales and marketing support from the big U.S. wireless carriers it once enjoyed and needs to rebuild their confidence, analysts say.

Chief operating office Marty Beard in December said the company is developing self-directed and indirect sales methods in addition to carrier channels to promote its hardware, software and services.

Blackberry shares closed in New York at $9.43 (U.S.) for a loss of 41 cents.

Toronto Star

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