Blackberry Ltd (BBRY) Classic Impact On Sales & Investors

Posted by Nathan Alexander December 18, 2014 0 Comment 1618 views


Blackberry Ltd (NASDAQ: BBRY) has in the recent times kept a low profile on the hardware front  that one might think the company was plotting its retirement from the hardware scene. However, the launch of the Classic suggests that the company is here to compete in the phone market.

Blackberry Ltd (NASDAQ:BBRY) unveiled the Classic in New York City, and the device has already gone on sale, mostly online. It is available on Amazon.com, Inc. (NASDAQ: AMZN)’s e-commerce platform and BlackBerry’s own Web portal. The Classic will also soon be available at AT&T Inc. (NYSE:T) and Verizon Communications Inc (NYSE: VZ). The phone goes for $449 through the online channels mentioned earlier.

Low sales target

Although the company has launched a new phone device, perhaps to send a message that it was not exit the phone competition, it targets low phone sales. According to the CEO, John Chen, their goal is to sell 10 million units of phones every year. However, that is far below what rivals are selling. At Apple Inc. (NASDAQ:AAPL), for instance, sold over 39 million iPhone devices in 3Q alone. The fact that BlackBerry has set its phone target low may suggest that hardware is taking a backseat in the company’s operations.

Physical keyboard persists

In the Classic, Blackberry Ltd (NASDAQ: BBRY) has still stuck with its roots. The phone features a traditional keyboard. However, that is happening when most smartphone makers and users are increasingly embracing touch screens. At the launch of the Classic, Chen mentioned that it was true as some people had said that the Classic is aimed at BlackBerry’s loyal customers. Traditional BlackBerry customers prefer the physical keyboard because it is convenient for typing compared with the touch screen. Additionally, the traditional keyboard still has a strong appeal among business users, which is one of the customers that BlackBerry seems to target with the gadget.

Foxconn partnership

Blackberry Ltd (NASDAQ: BBRY) offloaded the responsibility of handling the phone inventory to Foxconn, a Taiwan company that mostly handles contract manufacturing projects. Foxconn also does business with Apple. The partnership with Foxconn means that BlackBerry is spared the headache of dealing with losses when phone inventories fail. The Classic is another product manufactured in collaboration with Foxconn.

New strategy

Although BlackBerry is still trying to squeeze the juice in the hardware market, the company has its efforts and resources mostly committed to enterprise security and software. It is now offering its software and security solutions across multiple platforms that include Android and iOS, which is a strategy to survive the decline of its own devices.

In the case of the Classic, Blackberry Ltd (NASDAQ: BBRY) not only makes security claims about the gadget to set it apart from the competition. It also touts its long battery life, which is something that smartphone users are looking for these days.



About Nathan Alexander

Nathan Alexander holds bachelor’s degrees in Journalism and European Studies from Boston University. Nathan reports round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. He has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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