BlackBerry Ltd.’s large, keyboard-laden Passport smartphone, set to be unveiled on Wednesday, so deeply divided company executives over the past few years that many doubted it would ever make it to market.
Since it was conceived several years ago, three successive CEOs have been skeptical about the project at some point, including present leader John Chen, insiders say. “This was very controversial in the company,” said one senior engineer who worked on the project. “Most people internally reacted negatively to it.” But the strong reactions in fact signalled to the company it might just be on the right track. “We weren’t looking for comfort. It had to stand out and be strong. The design had to be aggressive. Love it or hate it, it had to be polarizing.”
That, insiders say, is exactly what BlackBerry needs after years of dwindling sales. The Waterloo, Ont.-based company’s share of global smartphone sales stood at 0.5 per cent in the second quarter, down from 13.6 per cent three years earlier, according to market research firm IDC. Smartphones with keyboards – BlackBerry’s claim to fame – now account for less than 1 per cent of global sales.
At the same time, the smartphone market has matured and been commoditized to the point that many touchscreen devices appear similar in form and design: the new iPhone 6 Plus and Samsung Galaxy Note 4 have almost identical dimensions and appearances, with an all-glass front and a single button on front.
“Nothing interesting is going on,” the BlackBerry engineer said. “The Passport” – a hybrid with both a keyboard and a touchscreen – “had to be very different and cool and new and stand out.”
The Passport keyboard is different from past BlackBerrys because it has three rows of keys, not four, with the space bar nestled between the V and B keys. The Alt key has disappeared, and the shift key and numbers and symbols have been moved off the keyboard onto the touch screen. “It’s visually cleaner and simple,” one insider said. “If it was just seen as more classic-looking, nobody would care. We found a way to break that.”
Somehow, the odd-looking device – with a screen measuring 33/4 inches squared, about an inch wider than the BlackBerry Q10 – has survived the tumult of recent years, including management overhauls, failed product launches, an abandoned privatization and heavy downsizing.
The question now is whether the Passport will catch the fancy of business users it is intending to woo. BlackBerry is expected to report second-quarter revenue of about $1-billion (U.S.) and a loss of about 16 cents a share on Friday. Mr. Chen has promised the company will return to positive cash flow next year. Much of that depends on the success of the Passport and another keyboard device, the Classic coming this fall. The two products “give [BlackBerry] a reasonable chance to achieve cash flow break-even ahead of schedule,” CIBC analyst Todd Coupland said in a note.
Passport’s route to market can be traced to patent filings that show the company was working on key features on the device as early as seven years ago, based on details released by the company so far (it is keeping most features under wraps until 10 a.m. Wednesday). That includes the three-row keyboard and the ability for the entire keyboard to double as a trackpad when a thumb is swept across it.
By the late 2000s, some customers were pushing for devices with larger screens, which led to the company’s failed PlayBook tablet. Passport was conceived be the size of an actual passport, aimed at busy executives who preferred typing on a physical keyboard but wanted a bigger screen. “As the name implies … the format is inspired by a traveler’s passport, a familiar and universal symbol of mobility,” Passport designers said recently on a company blog.
Former co-chief executive Mike Lazaridis liked the screen size but felt it was too drastic to alter the keyboard, say people familiar with the matter. Successor Thorsten Heins and other executives were skeptical because Passport tested poorly with focus groups. But it had staunch defenders who protected the product in part by arguing that if companies were led by focus group feedback that “you’d make an iPhone every time,” one insider said. They felt market research about such an unusual device was deceiving, citing other products that succeeded despite initial skepticism.
Finally, in 2013, the Passport was placed on the company’s product “road map.” Prototypes were ready by early 2014, when a new group of executives under Mr. Chen joined. Even he wasn’t sure about it, they say. “Initially when I looked at it I said, ‘Wow, this is big,” Mr. Chen said. “The first thing you think is, ‘Where do I put it?’ Then you realize [like a passport] you could put it in your blaker pocket or your handbag. We want you to overcome that ‘wow, it’s big, where do I keep it?’ ” When the product was shown to carriers this year, several responded favourably, and it got the final green light.
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