BlackBerry Unveils Last Phone in Pipeline

BlackBerry Ltd. unveiled a new Android-powered phone on Tuesday, marking the end of an era for the once-dominant smartphone maker as it cedes handset development to third-party manufacturers to focus on software.

BlackBerry said its new phone, called the DTEK60, offers a 5.5-inch screen and all-touch keyboard, and will retail for $499. Much like its successor, the DTEK50, the new device is loaded with proprietary encryption technology that protects against cyberattacks and privacy violations.

The new phone stands up to the hardware packed into Apple Inc.'s iPhone 7 Plus phone and the newly launched Google Pixel XL with additional security features, said BlackBerry Chief Operating Officer Marty Beard in an interview.

"We have a very strong entrant," said Mr. Beard. "We market [the DTEK series] as the world's most secure phones."

The new device uses a unique feature called "hardware root of trust" to add security keys that prevent it from being counterfeited, the company said. It also offers a fingerprint sensor on the back.

BlackBerry said at the end of last month, in conjunction with second-quarter results, that it would stop making devices to focus on software.

While the company will no longer control end-to-end development, BlackBerry-branded devices will continue to be released by third-party developers, Mr. Beard said. The company already announced a joint venture with an affiliate of PT Telekomunikasi Indonesia Tbk, the country's largest wireless carrier, to produce, promote and distribute all Blackberry-brand devices in Indonesia.

Analysts had been expecting BlackBerry to give up on its hardware business for some time as device sales weighed on the company's bottom line. The company sold 400,000 devices in its fiscal second quarter, down from 500,000 in its first quarter and 600,000 the quarter before that.

BlackBerry had fiscal second-quarter revenue of $334 million, down 32% from a year earlier. Revenue from its mobility solutions division, which includes device sales, was $105 million, down from $206 million a year earlier.

"We're still very much in the smartphone business, but we're now focused on the 'smart' in the phone," Mr. Beard said.

The latest device, the company's third Android-powered phone, will be available in North America and Europe on Tuesday through BlackBerry's e-commerce sites. The company is working with a number of distributors in other countries to make the device available world-wide, Mr. Beard said.

While the company announced plans in July to stop making its Classic smartphone, another physical keyboard-equipped device isn't off the table. Mr. Beard said the company may soon help develop a keyboard-equipped phone depending on market demand. BlackBerry is also working on an update to its BB10 operating system and the company remains committed to its proprietary operating system, Mr. Beard said.

Write to David George-Cosh at david.george-cosh@wsj.com

(END) Dow Jones Newswires

October 25, 2016 08:35 ET (12:35 GMT)

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