BlackBerry Ltd. is not ready to give up on its hardware business just yet, announcing a second Android-powered smartphone despite the limited success of its first attempt.

The company is still plugging away with its handset business, although sales have diminished to a sliver of previous levels. BlackBerry used to be a major player in the cellphone business before losing out in spectacular style to rivals such as Apple Inc. and Samsung Electronics Co.

BlackBerry DTEK50
Image source: YouTube

Analysts pessimistic on BlackBerry handset business

Various analysts have recommended that BlackBerry give up on its handset business to concentrate on its profitable software business. The firm now sells less than 1% of the smartphones in the world.

“Without significant scale it’s very hard to make money on Android,” said Gus Papageorgiou, an analyst at Macquarie Group Ltd. The company’s handset business made a loss of $21 million for the quarter ending May 31.

The aim is to make the handset business profitable in order to boost sales in the software and patent licensing division. If the handsets made money BlackBerry would also buy itself more time in which it would be able to develop new secure devices.

DTEK50 latest Android-powered smartphone

The new Android-powered smartphone is called DTEK50 and will sell for $299. The handset does away with the classic physical keyboard in favor of an all-touch version, and will have a 5.2-inch screen.

Perhaps the most interesting feature is the proprietary encryption technology, which will protect photos, contacts and other date from the prying eyes of hackers. A built-in alert system will tell users when their location is being tracked by applications or software is accessing the phone’s microphone or camera.

Another nifty feature is the unified inbox developed by BlackBerry, which combines email, text and other messages in one application.

“DTEK50 merges unique security and connectivity features…with the rich Android ecosystem,” Ralph Pini, head of BlackBerry’s device business, said in a statement. There are also plans to release another Android-powered device with a physical keyboard in this fiscal year.

Odds against new smartphone

The Android operating system powers over 80% of smartphones in the global market. BlackBerry needs a successful handset after previous releases have fared poorly. For example BlackBerry sold just 500,000 devices in the last quarter, down from 2.1 million in the quarter ending 30 August 2014.

Plans have been announced to stop manufacturing the Classic smartphone, and analysts thought this could spell the end of the BB10 operating system. However BlackBerry maintains that it will continue to support its proprietary OS.

Sales of BB10 devices have been depressed by incompatibility with popular apps. The BlackBerry Priv was meant to combine the company’s cybersecurity strengths with popular apps from the Android Google Play app store, but consumers have not bought into the idea.

The Priv had a massive $699 price tag which may have been partly responsible for poor sales. At $299 the DTEK50 will appeal to mass market consumers, but it will enter into a crowded marketplace for mid-range smartphones.

Another issue is the lack of partnerships with major phone carriers. BlackBerry has not reached any agreements with Verizon, AT&T or T-Mobile to distribute the DTEK50.

The phone will ship the week of August 8, but pre-orders are being taken from 26 July for customers from U.S., Canada, the UK and some European markets. In the U.S. the handset will be available from Amazon.com Inc., Best Buy Co. and B&H Foto & Electronics Corp.