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John Chen Will Kill BlackBerry (BBRY) with His Love for Android

BlackBerry BBRY DTEK 50

Last week on Thursday, it was reported that BlackBerry Ltd   is on the verge of releasing new Android smartphones. The firm has refused to get out of the hardware business and CEO John Chen believes that he could turnaround the fortunes of the firm by building a blockbuster device that people would love. The problem however is that the firm has missed the mobile revolution that led to the emergence of Android and iOS.

BlackBerry BBRY DTEK 50

It doesn’t take much analysis to know that BlackBerry is forging an alliance with Android OS in its quest to build a blockbuster smartphone. The firm’s BB10 OS could run some Android apps and the firm actually unveiled a full Android device called the BlackBerry Priv. Now, BlackBerry has confirmed last week’s rumors and it has unveiled a new Android smartphone.

Meet BlackBerry DTEK 50

The arrival of BlackBerry DTEK 50 makes one wonder if John Chen’s actually has a workable plan to revive the firm. The DTEK 50 has an uninspiring name and it is unclear if any market research went into naming the device.  The device sports a Qualcomm Snapdragon 617 processor, 5.2inch screen, 1080p display, 13-megapixel camera ,3GB RAM, and it runs  Android 6.0 Mashmallow. Interestingly, the firm says the DTEK 50 is the “world’s most secure” android device because it is fortified with a security feature that the average consumer won’t be interested in using.

It is too early to know how the DTEK 50 will fare in the market but you can expect this phone to be another failed attempt by BlackBerry   to reclaim its glory days.  John Chen naively thinks that the Priv was a flop because of its high price tag. Hence, he has built a plasticy device that retails for $299 in order to increase volume sales.

The problem however is not in the price of the devices but the perceived quality of the brand and product. For what it is worth, Apple sells expensive phone, it controls only 11% of the global smartphone market but it makes about 90% of profits in the global smartphone market. Very few people think about buying a BlackBerry in the general consumer market and most of its sales goes to enterprise and government buyers. Hence, the firm has no business forcing its way into the consumer electronics market for smartphones.

John Chen’s love for hardware might eventually kill the BlackBerry

Many analysts, shareholders, and concerned members of the public have called on John Chen to ditch the hardware division. He has previously said that he is giving the handset division until September to turn a profit before the ax falls. Yet, on Monday, he posted a tweet saying “the BlackBerry smartphone and physical keyboard are here to stay”. The desperate actions leading to the development of the DTEK 50 suggests that John Chen would rather not ax the handset division.

However, John Chen’s sentiments for keeping the handset division might turn out to be a liability for the firm in the grand scheme of things. BlackBerry can’t seem to build a good enough device to compete with rivals and when it actually builds decent devices, it lacks the marketing machinery to sell them en mass.

Secondly, the firm’s fixation on hardware is a distraction the firm is starting to lose touch with its security offerings.  The firm’s $2,000 ultra-encrypted handset was cracked by the Netherlands Forensics Institute earlier this year. Instead of responding with a more secure solution, the firm was busy building a $299 cheap smartphone. Now, the U.S. senate has announced that would stop buying Blackberry devices for its staffers – it is only a matter of time before other enterprise and government buyers jump ship.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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