With BlackBerry Passport, a New Era Begins for the Smartphone Maker

The BlackBerry Passport is a throwback to the company's boxy devices of the past. Credit: BlackBerry.

Next month, BlackBerry's (NASDAQ: BBRY  ) Passport smartphone will make its way to U.S. customers, once more vying for market share amid a sea of Android and iOS alternatives. Can it win? Let's review how BlackBerry pitches the device.

Specifically, BlackBerry says that the rectangular design common to modern smartphones may be "limiting innovations" as it limits screen space. The Passport offers 4.5-inch square HD screen that allows for 60 characters on a line versus 40 for most rectangular smartphones. Partnering with Amazon.com to provide access to over 240,000 Android apps is a welcome bonus. 

"The BlackBerry Passport offers its size and aspect ratio to accommodate these characters, making it the ideal device for reading e-books, viewing documents and browsing the web. No more worrying about portrait or landscape modes, and no; you aren't missing anything," says writer Matt Young in a recent post at the Inside BlackBerry blog.

To some, that's likely to come off as unconvincing justification for a boxy, ugly design that's more reminiscent of the original BlackBerry pager than a modern smartphone. To others, it may be just the unconventional pitch they've been waiting for. Either way, the Passport is critical to BlackBerry's future.

The Passport: a doorway to more business

Yes, I know how that sounds, especially in light of CEO John Chen's commitment to diversifying the business. Hardware sales accounted for only 39% of revenue in the most recent quarter.

And yet diversify doesn't mean ditching hardware altogether. Rather, Chen and his team are busy cultivating new QNX-based ecosystems for devices like the Passport to plug into. For those who don't know, QNX is an operating environment that powers the BlackBerry 10 mobile operating system used by the Passport, as well as Internet routers, navigation systems, and NantHealth's hospital network. It's an ambitious strategy that calls for BlackBerry to win back the enterprise market one lucrative niche at a time.

As Chen put it in the last earnings call: "When we have a chance to lay out our plans and visions, the majority of the time, we get [enterprise customers] to support us, to stay there. What I have found is people like to stay with BlackBerry. They were concerned a little while back, and I need to try to regain back that confidence." 

Smarter hospitals = a smart strategy

BlackBerry announced its investment in NantHealth in April. The deal allows the company to shape and add capabilities to a network that's already based on QNX and which connects some 250 hospitals and 16,000 medical devices around the globe.

You can bet that BlackBerry will be pitching the Passport at every North American hospital where NantHealth has a presence, and pitching related handsets in overseas markets.

Now imagine this same strategy repeated in other niches and in different geographies. First, you acquire or invest in a QNX-based ecosystem. Then, add capabilities. Finally, sell hardware to take advantage of said capabilities. Rinse, repeat, profit. 

OK, maybe it's not that easy. And yet if Chen is right and 80% BlackBerry's 50 million subscribers are business users, then it makes sense for the company to focus its efforts on niches with above-average budgets and defined needs. Healthcare is that sort of market.

A better Blackberry

Meanwhile, the underlying business is improving -- even if you might not know it looking at the financials. Fiscal first quarter revenue fell 69% to $966 million, resulting in an $0.11 loss. The good news? BlackBerry only suffered a $0.13 per share loss in last year's Q1.

Apparently, that's cause for enough optimism to cease job cuts. In an internal memo obtained by Reuters, Chen said BlackBerry had largely completed the restructuring process started three years ago. He also announced plans to "add headcount" in product development, sales, and customer service in "modest numbers." BlackBerry has eliminated about 60% of its workforce since cuts began.

Foolish takeaway

Now, Chen gets to put away the axe and focus on growth in markets dominated by business users with highly specific needs. BlackBerry Passport is key to strategy, and we won't know whether the company is truly "back" until we see how business buyers take to the device. Keep your eyes on the sales charts.

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While BlackBerry was busy working on the Passport, Apple was recruiting a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Read/Post Comments (5) | Recommend This Article (3)

Comments from our Foolish Readers

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  • Report this Comment On August 13, 2014, at 11:03 AM, melegross wrote:

    New era? Have you been reading all the articles about this phone? What this will be for Blackberry is a new Flopphone.

    This is nothing more than a desperate move by a failing company that can't figure out what to do about crashing phone sales.

    Someone comes up with this idea because it's different, and they all jump on it as though it's going to turn things around. I suppose you believe everything companies pass out from their marketing departments.

  • Report this Comment On August 13, 2014, at 11:38 AM, algekko wrote:

    This will be the best blackberry ever! I can't wait until it comes out. People with negative remarks don't understand the concept of this phone.

    At first I thought it looked kinda of weird, but it warms up on you and this will be my next Blackberry.

    I like the bigger screens, good for spread sheets and word documents.

    The Amazon apps is a bonus.

    I've been a Blackberry user for about 5 years and just recently I switched to the HTC one m8. I wanted to try something new. I used it for about a month and then gave it away. I went back to my 3 year old bold 9900. I'm not going to mention all the reasons why I didn't like the android, I'm sure there are many post on people who switch back to blackberry. Bottom line, Blackberry is the best phone for me, as a user. Android has its own place and I think iPhone is over rated.

    There's a time to play and a time to work

    that's what Blackberry phones and Android tablets are used for.

    There is no one device that can do it all flawlessly.

  • Report this Comment On August 13, 2014, at 11:39 AM, algekko wrote:

    Although I think this phone will do both very well (play+work)

  • Report this Comment On August 13, 2014, at 3:44 PM, StanleyMorgan wrote:

    This isn't a phone -- it's a little computer to replace your laptop that happens to have telephony capabilities. BlackBerry changed the game in a huge way back before wifi, when you had to tether your BlackBerry to your laptop to have mobile Internet. Now they're changing it again by doing what they do best: putting tools in the hands of professionals to allow for fully mobile productivity. This device probably won't sell 1/10 what the new iPhone sells, but it won't need to if they control inventory well. With the NantHealth partnership, this will become the "doctor phone," and each unit sold will bring nice ongoing service revenue. Nice play, BlackBerry!

  • Report this Comment On September 11, 2014, at 6:11 AM, awally wrote:

    You should write, "What a fantastic physical keyboard !"

    Passport keyboard is working just like the Incredible Z30's touchscreen keyboard.

    Have you ever use the Z30 ?

    It's the best touchscreen keyboard on the market.

    Incredible, the Passport whole keyboard works like a huge trackpad.

    Better, it's just like playing with a "Flipper"

    You shoot the word up on the line.

    Flick the words showing off at the bottom of the screen.

    It's fun & easy with this "Ready-to-Type" Smartphone.

    You can enjoy your screen display, fully & permanently, all the time,

    You don't have to play hide & seek with a touchscreen keyboard.

    It's a "Ready-to-Watch" Smartphone...

    Even with the world best keyboard on board,

    you can speak instead of writing.

    BB 10.3 come a new Voice Command.

    Passport is a "Ready-to-Talk" Smartphone.

    You can make Full HD Video Conference Call, in Stereo, with 4 microphones...

    This will be your best companion.

    Passport will never leave your pocket...

    Passport scale perfectly Androïd Apps.

    500,000 native & androïd Apps secure & approuved Apps powered by this luxurious 4WD Smartphone... Otherwise Guardian & Trend Micro will keep your device clean.

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