The Passport, which was showed off at the Consumer Electronics Show in Las Vegas this week, received a shot in the arm by being picked up by AT&T in the United States, former BlackBerry executives say.David Paul Morris/Bloomberg
BlackBerry Ltd. CEO John Chen got a boost in his attempt to revive the company Wednesday as giant U.S. carrier AT&T Inc. became the first to commit to sell and promote its oversized Passport smartphone in the United States.
But there's a catch.
In exchange for giving the carrier the exclusive right to offer the hybrid touchscreen/keyboard device, BlackBerry agreed to round the right-angled corners of the Passport for a customized AT&T phone. AT&T, in turn, will offer the $650 (U.S.) device for as little as no upfront cost if customers sign up for one of its contracts.
BlackBerry has offered customized devices in the past in exchange for carrier exclusivity, a practice Apple Inc. shunned when it introduced its one-model-for-everyone iPhones in 2007. AT&T did not say when it would begin offering the Passport, only that it would be available "in the near future."
Former BlackBerry insiders say AT&T didn't initially think much of the Passport, a device that also sharply divided the smartphone maker's executives over its odd and distinctive square screen and low-slung, three-row keyboard.
But while designers fought for the Passport, arguing it was better to produce a distinctive-looking device that would stand out from a sea of touchscreen competitors, AT&T executives were more comfortable with what one BlackBerry insider called a "more bland but less polarizing" look by rounding the sharp corners.
"AT&T wanted rounded corners. Some of us are more square. No other reason than that," Mr. Chen said at a press conference at the Consumer Electronics Show in Las Vegas, according to technology blog CrackBerry.
The announcement marks the second time in a month AT&T has supported a new BlackBerry. An AT&T executive joined Mr. Chen on stage at the launch of the Classic smartphone in New York City in December. In the past, BlackBerry benefited from huge carrier-backed marketing campaigns that featured its phones prominently when it was the leading smartphone purveyor in the world. Its market share has since dwindled globally to less than 1 per cent. It's not clear how much of a marketing push AT&T will put behind the new BlackBerrys.
The launch of the Passport and Classic last fall are part of Mr. Chen's plan to focus on BlackBerry's traditional business and government base. The company is also offering new services and software to help large users manage their smartphones.
On Wednesday, the company launched its "Internet-of-things" platform at CES, based on industry-leading technology picked up in its 2010 purchase of Ottawa-based software developer QNX Software Systems. BlackBerry is one of many firms at the trade show offering technology to link up a variety of devices.
Several former senior BlackBerry executives said AT&T's support for the new devices is encouraging following years of little to no backing by U.S. carriers as Apple and Android devices captured most of their sales and marketing dollars.
"This is for sure the start of better marketing support," said one former executive. "The price for this support was an exclusively modified product. The benefit [to BlackBerry] will be in terms of co-marketing support and product pricing/discounting."
A former BlackBerry sales executive said in an e-mail: "It's positive given the lack of support" for BlackBerry's recent devices, "but ultimately what matters is whether it's a great product or not, and customers decide that, not carriers. Some of the problems of the past were putting what carriers thought of the product/experience ahead of thinking about the customer." The executive observed Amazon's Fire smartphone launch was a disappointment despite AT&T support.
Another former sales executive questioned whether AT&T rival Verizon Communications Inc. had been outbid for an exclusive distribution agreement or simply wasn't interested in the Passport, giving AT&T an exclusive "by default." A BlackBerry insider involved in the Passport development said the latter was indeed the case: "Verizon wasn't very happy with us in general and had no interest in anything new or innovative from us." A Verizon spokesman confirmed the carrier will carry the Classic this year but hasn't set pricing or a launch date. The company did not respond to questions about the Passport.
AT&T and predecessor BellSouth have long offered the Waterloo, Ont.-based company's devices – dating to when it sold two-way pagers in the 1990s. But AT&T was also the carrier that introduced and for four years exclusively sold Apple's iPhone, the all-touchscreen device whose popularity heralded BlackBerry's decline.
In Canada, all three major wireless carriers, Rogers Communications Inc., BCE Inc. and Telus Corp., offer the Passport and the Classic.
Sean Silcoff