TORONTO BlackBerry Ltd (BB.TO)(BBRY.O) said on Tuesday it will stop making its Classic model, raising further doubts about the future of the smartphone pioneer's money-losing handset business as the company shifts its focus to software.
BlackBerry's stock fell more than 4 percent after an executive confirmed the move in a blog post. BlackBerry launched the Classic less than two years ago, hoping it would resonate with customers yearning for a physical keyboard in a world of touchscreens.
"Clearly the Classic was not sufficiently retro-cool to attract new users," said John Jackson, a technology analyst at International Data Corp. "This marks the end of an era that actually ended several years ago for all but a very small number of devotees."
The Classic, similar in design to its Bold predecessor, is powered by the overhauled BlackBerry 10 operating system, which failed to regain market share that was lost to Apple Inc's (AAPL.O) iPhone and others.
BlackBerry has since launched a phone powered by Alphabet Inc's (GOOGL.O) dominant Android software and plans several more.
BlackBerry Chief Executive John Chen last month expressed confidence the company's trimmed-down handset business can turn a profit by a self-imposed September deadline, even as some analysts urge the company to ditch the unit.
The decision to end production of the Classic adds pressure on BlackBerry to exit handsets, said Morningstar analyst Brian Colello. Without a hit mid-range, BlackBerry likely will not be able to keep its handsets business going or sell it to another company, he said.
Separately, an internal U.S. Senate memo sent by IT staff and seen by Reuters on Tuesday said BlackBerry had told major U.S. carriers Verizon Communications Inc (VZ.N) and AT&T Inc (T.N) that all BlackBerry devices running BlackBerry 10 had been discontinued.
The memo said the Senate's mobile communications services department had just over 600 BlackBerry devices in stock at the end of June, including 320 Classic devices.
The other models referenced as discontinued include the Passport, with a physical keyboard, and the Z10 and Z30 touchscreen models.
Asked specifically about the memo, a BlackBerry spokeswoman said the company's device strategy is cross-platform and it will continue to support BlackBerry 10 phones.
Verizon and AT&T did not respond to requests for comment.
President Barack Obama, the most celebrated U.S. political BlackBerry user, told late-night television host Jimmy Fallon last month he had finally given up his BlackBerry, replacing it with an unnamed smartphone.
(Additional reporting by Patricia Zengerle in Washington, Allison Martell in Toronto and Arathy S Nair in Bengaluru; Editing by David Gregorio and Leslie Adler)
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Published Date: Jul 06, 2016 12:21 am | Updated Date: Jul 06, 2016 12:21 am