BlackBerry launches new smartphone with emphasis on beefed-up security

TORONTO – In a bid to once again make its struggling hardware business profitable, BlackBerry is launching a new smartphone billed as the most secure Android device available.

The company announced the launch Tuesday of the DTEK50, a phone it hopes will appeal to “everyone” due to the insidious threat that mobile security risks now pose to the public at large.

“We feel that customers today, certainly businesses and consumers, are beginning to understand just how important security is when it comes to their smartphone,” said Alex Thurber, senior vice-president of global device sales, during a webcast from BlackBerry’s headquarters in Waterloo, Ont.

Everyone should be aware of security and privacy, whether they’re the CEO of a Fortune 500 company or a parent, he said.

“I certainly want my children to have secure devices. I don’t want the world looking at what they take pictures of or their emails or their text messages.”

BlackBerry (TSX:BB) said the DTEK50 has been designed to fend off cyberattacks with features such as built-in malware protection and encryption of all user information. In addition, it provides the ability to see and control which apps are allowed access to features like the phone’s camera.

The new product is also BlackBerry’s thinnest and has an on-screen keyboard — not its traditional keyboard.

The DTEK50 will retail for C$429, a sign that the company may have learned from the sales flop of its first Android-powered phone, the Priv. At a cost of C$899 without a carrier contract, the Priv was released late last year and at the time, it was the most expensive Android phone on the market.

While BlackBerry hasn’t disclosed Priv phone sales, its most recent quarterly results released a month ago showed the company sold 500,000 smartphones in total (including the Priv). That’s a drop of 100,000 over the previous quarter and 200,000 fewer than two quarters earlier.

“We’re very confident that from a product perspective this will sell very well,” Thurber said of the DTEK50, whose name is derived from a feature on the Priv that informs users of their device security status and how to improve it.

But that price likely won’t be enough to win over a large number of customers, said Detlev Zwick, an associate professor of marketing at York University’s Schulich School of Business.

They will ask themselves what makes the DTEK50 different from other phones in the same price range, and while the answer may be its stronger security measures, that may not be enough to sway them, he said.

“I think most consumers in that price range simply don’t care much about that,” he said. Instead, they’re more concerned with how user-friendly an interface is, how fun applications are and how quickly they can access their Facebook friends, Zwick said.

“If they really want to change momentum, BlackBerry would need a hit with a handset,” he continued. “This is not it.”

BlackBerry anticipates the majority of DTEK50s will be sold to business clients, Thurber said later in a media roundtable in Toronto.

The company has faced calls to stop making smartphones because of disappointing sales and instead focus solely on its growing software and security business.

CEO John Chen has so far shown no inclination to heed those calls, having promised earlier this year to release two mid-range, Android-powered phones before the company’s fiscal year ends Feb. 28, 2017.

Thurber reiterated that commitment, saying BlackBerry will continue to develop and release Android phones. Multiple devices are planned to be released before the financial year ends, he said, including one in the near future that will have a physical keyboard.

The DTEK50 is available for pre-order online, with plans to start shipping Aug. 8.

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