Will BlackBerry Ltd Exit Smartphone Business? Probably Not

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BlackBerry fans want to know if CEO John Chen will really follow through with his September 2016 deadline to decide the future of the company’s hardware segment. Motek Moyen said in a post for Seeking Alpha that he believes the Canadian firm probably will not announce the discontinuance of smartphones but rather will reveal or discuss the DTEK60, the Android-based phone that was leaked recently.

BlackBerry must continue with Android phones

The DTEK60, which is expected to be packed with a Snapdragon 820, might be the rumored BlackBerry Argon. The DTEK60 is the higher-end version of the less expensive DTEK50, which was released earlier this year. Next week, BlackBerry’s stock could rise after the company’s next quarterly earnings report, and Chen could also shock us with news that his rebranded DTEK50 assisted the smartphone segment in getting some profit, says Moyen.

According to reports, the Canadian firm notified carriers that some BB 10 OS phones like the Classic are discontinued now, but Moyen believes the company will continue as an Android phone vendor. The Canadian firm has to continue supplying handsets to its loyal government and corporate clients. It is possible that it will release a QWERTY keyboard-equipped Android phone for loyal corporate/government officials who are used to QWERTY keyboard-equipped BB10 OS phones.

When BlackBerry releases its earnings report next week, there are good chances it will post another operating loss on hardware. Chen will, however, need more time for his new strategy of selling rebranded Android smartphones. Even if he continues the money-losing phone hardware division, no one is going to fire him. The board will probably just extend his September deadline to make the phone division profitable if he asks for it, notes Moyen.

BlackBerry should promote its phones better

BlackBerry’s hardware business accounted for more than 65% of its R&D budget, but it may reduce that budget going forward because now it is rebranding Android phones made by TCL Communications. Also there is less risk of unsold inventory in this model since Chen will likely order DTEK60 units from TCL on a just-in-time basis, depending on the market demand.

The company is already saving some cash in rebranding TCL-Alcatel phones, and the Canadian firm could use some of that cash to promote its rebranded Android phones. Chen could hire celebrities to promote the DTEK50 or DTEK60 in mature and emerging markets. Further, Moyen says the company should stop depending on its “most-secured Android phone” marketing slogan, and market the phones as “photography or selfie-friendly.”

“The key to recovery in smartphone sales is for BlackBerry to start winning the hearts of ordinary consumers. It should never depend on marketing phones only to security-conscious business users,” concludes Moyen.

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