BlackBerry's Got a Brand-New Phone, Too

Passport Is Part of CEO John Chen's Attempt to Win Back Business Users

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BlackBerry unveiled the square-screened Passport phone at events around the world today, as Chief Executive Officer John Chen tries to win back business users even in the midst of a turnaround.

"When you come out of restructuring, when you come out of financial problems, once you stabilize the company, customers and the market will only respond if you're innovating again," Mr. Chen said in an interview before today's announcement.

The Passport is BlackBerry's first major new device introduced globally since Mr. Chen was named CEO in November, the same day that a planned buyout of the Waterloo, Ontario-based company collapsed. The Passport is geared toward professionals, part of Mr. Chen's plan to ditch the company's flagging smartphone sales among consumers and instead concentrate on higher-margin services for corporations.

With a 4.5-inch (11.4-centimeter) screen and a physical qwerty keyboard that doubles as a touch-sensitive swipe pad, the Passport is focused on work productivity. That stands in contrast to Apple new iPhone 6 and larger iPhone 6 Plus that cater to video consumption for the consumer market.

At an event to unveil the Passport in Toronto today -- one of three held simultaneously around the world – Mr. Chen brought to the stage former professional hockey player Wayne Gretzky. Mr. Gretzky touted the new phone's long battery life, as Chen called him a Canadian national hero and vowed that BlackBerry will "win our home country back."

Bringing back the Classic
Mr. Chen also said the company plans to release the keyboard-equipped Classic smartphone by the end of the year.

BlackBerry is facing a shift in the business world with more workers using their own devices instead of employers providing them, meaning companies aren't trying to buy new handsets in mass, said Ehud Gelblum, a New York-based analyst with Citigroup Inc.

"There's this concept that's been created about this being a seminal moment and this is the turning point," Mr. Gelblum said in a phone interview. "This is just yet the next step."

The Passport's target user base of "power professionals" refers to people who are educated, well-paid and employed in security-sensitive industries like health care and finance, said Marty Beard, BlackBerry's chief operating officer.

"Everything that we're doing at the company is pointed towards this segment -- all of our marketing activity, our sales activity, our partnering activity," Mr. Beard said in a briefing.

Professional users make up almost 10% of the global smartphone market, according to the company's research, Mr. Beard said.

"That's a lot of smartphones, especially in the premium space," he said, declining to provide specific sales targets.

The phone goes on sale today in Canada, France, Germany, the U.K. and the U.S., and will be available in more than 30 countries by the end of 2014. The Passport will also be available through

BlackBerry will sell the new handset at a "special introductory rate" of $599 in the U.S. without a mobile plan, undercutting the iPhone 6, which went on sale last week for $649. AT&T will carry the Passport in the U.S., BlackBerry said.

The global unveiling is taking place two days before the company releases second-quarter earnings results. It's all part of Mr. Chen's plan to reach break-even cash flow by the end of this fiscal year and return to profitability during the year that will end in early 2016. For the quarter that ended Aug. 31, analysts are projecting BlackBerry will report a net loss of $120.2 million on revenue of $948.5 million.

If the Passport doesn't sell well, Mr. Chen says that won't derail his effort to save BlackBerry.

"It's just going to make the turnaround a little more difficult, but it's not going to stop the turnaround," Mr. Chen said. "This is going to do well."

Chen said he canceled some devices under development when he joined the company. The Passport, on the other hand, was more innovative with its unique form, he said.

Since taking the helm, Mr. Chen has outsourced manufacturing to Foxconn Technology Group and focused BlackBerry's efforts on selling device management and messaging software to security- conscious companies and governments. The company's software is now available on iPhones and Android devices, and Mr. Chen said such enterprise services are the most important part of his turnaround plan.

--Bloomberg News

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