BlackBerry says it will end production of BlackBerry Classic smartphone

TORONTO – BlackBerry is hanging up on the Classic, less than two years after it launched the smartphone in an effort to keep its grip on customers who favoured its standard keyboard.

The decision to stop making the device comes as BlackBerry faces calls to get out of its money-losing hardware business altogether and instead focus solely on its burgeoning software technology — calls it has so far brushed aside.

“The Classic has long surpassed the average lifespan for a smartphone in today’s market,” Ralph Pini, the company’s chief operating officer and general manager for devices, said in a company blog post dated Tuesday.

The BlackBerry Classic hit the market in December 2014, offering customers a 3.5-inch screen — 60 per cent larger than the previous BlackBerry Bold 9900 that it was modelled after, only with more modern touches such as a longer battery life and, in addition to a keyboard, a touch screen.

BlackBerry (TSX:BB) said consumers tend to upgrade within a year to 1 1/2 years after purchasing a phone, while companies keep theirs between three and four years.

The Waterloo, Ont.-based firm will now focus on updating its smartphone lineup, Pini said.

“We are ready for change so we can give our customers something better,” he said.

The company will continue to support its BlackBerry 10 operating system with software updates, with a new version scheduled for release in August, he added.

BlackBerry is expected to release two new mid-range, Android-powered smartphones before the end of February. CEO John Chen has said one will feature a touch screen. More information on the devices is expected this month.

In its first quarter, its most recent, BlackBerry sold roughly 500,000 smartphones, about 100,000 fewer than in the previous quarter. Despite the lacklustre results, the company has no plans to stop making the Priv, the Android-power phone it released late last year.

BlackBerry’s decision to continue to make new models seems to be a penetration tactic, said Marc-David L. Seidel, an associate professor at the University of British Columbia’s Sauder School of Business.

“It would not surprise me if they moved further away from hardware and more towards the software back end for the secured communications,” he said, adding that BlackBerry may still offer a few smartphones preloaded with the software they are trying to push.

Chen has said he believes a new venture to license BlackBerry’s mobile software to other companies can help turn its mobile business segment profitable this fiscal year, which ends in February.

Seidel said that approach could become profitable for the company as it is still perceived to have a competitive advantage in security software, but it would have to move quickly as they face a lot of competition in that area.

“Their best chance of survival going forward would be to focus more on the software side,” said Seidel.

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