BlackBerry's latest phone started life as a price point: The company needed an entry-level phone – $299 (U.S.) – and that meant it needed a partner who could deliver value cheaply.
To get there, BlackBerry turned to China's TCL Corp. to make its new device, the DTEK50, which is essentially a rebranded Alcatel Idol 4, first released in February, but with BlackBerry's security software built right into its firmware.
TCL is the No. 6 Android handset maker, with about 13 million devices sold a quarter. BlackBerry's last quarterly report indicated the company's device sales had slipped even further to 500,000 phones.
Clearly, BlackBerry needed help reaching the mid-range $200-$400 Android market, where all the growth is happening.
"We know how to make an expensive phone," Alex Thurber, vice-president of global device sales, said of the company's first Android phone, Priv. Released in November, the premium device with a slide-out QWERTY keyboard hit $900 in Canada. "This is a fleet device."
Mr. Thurber said he was brought to BlackBerry in April with one simple goal – to turn around the flailing handset unit. While he won't share sales targets for how the DTEK50 will have to perform to help him achieve that goal, at this point any sales growth would be welcome.
The executive, who lives in Oregon, is new to hardware sales, having spent most of his recent career in the software-security world during turns at Watchguard, McAfee and Cicso.
It's been a long, hard road for BlackBerry to get to this point, where it's putting its name on a device made by another manufacturer. In 2011, the company sold, on average, about 13 million devices a quarter; in its 2016 fiscal year, it dipped below a million devices a quarter, finishing the year selling only 600,000 devices in its fourth quarter, and starting the first quarter of fiscal 2017 selling fewer than 500,000 devices.
It's not the first time the company took an existing device and adapted it for its needs; the Z30 and Leap phones were based on reference designs. But the DTEK50 takes it to a new level. It has a 5.2-inch screen (measured diagonally) running Android Marshmallow with a 13-megapixel main camera (and an eight-megapixel "selfie camera" on the screen side). It has better battery performance than the Idol it is based on – 17 hours of normal use compared to the Idol's 15 – but in almost every other respect, its performance and specs are the same.
While BlackBerry calls this the most secure Android on the market, it is not as secure as its BB10 devices and doesn't have the same certifications for government grade protections. The company says it has plans to pass those crucial tests in the next six to eight months.
The phone is named after the security software BlackBerry built for its Android phones, and lets users see what kinds of data and permissions apps have – such as Pokemon Go, which has access to your contacts, as well as your location – and alter them with just a few clicks to make their phones more secure.
Letting TCL build a critical device for BlackBerry may turn out to be a smart move; the cheaper premium devices of China's smartphone makers have overtaken most of the better-known players: between Xiaomi, Huawei, Oppo, ZTE and TCL, China's smartphone brands are shipping more than 100 million devices a quarter. And despite costing less than half of its previous Android phone, the $799 (U.S.) Priv, BlackBerry says it will still make money on the device.
There are at least two more BlackBerry Android devices planned for the fiscal year, the first of which is expected to have a physical QWERTY keyboard. Both will be priced in the mid-range market.
BlackBerry unveiled the DTEK50 in a low-key question-and-answer event live streamed from its Waterloo operations centre, with graphs of the BlackBerry network's performance in the background. Chief executive officer John Chen wasn't at the rollout, but has previously said that if the hardware unit doesn't achieve profitability, it could be closed down as early as September, or as late as the end of the year.
Analysts continue to question whether the company should be making handsets at all. In its most recent quarterly update, sales of software passed hardware sales for the first time since the early days of the company, formerly known as Research In Motion Ltd.
"The bigger issue is not necessarily the price point for BlackBerry any more. The brand, the market share, has eroded significantly over the past years," said Tuong Nguyen, a personal technology analyst with Gartner Research. He points to the array of smartphone competitors that can offer more devices at lower prices (the Chinese brands), or that feature greater integration with an ecosystem of complementary technologies (Samsung, Apple). Price and BlackBerry security are just two potential items on a buyer's checklist of, say, 10 items and, according to Mr. Nguyen, BlackBerry's competitors check off seven or eight on the list. "You're coming from behind in the market and you're offering one device."
BlackBerry also doesn't have a carrier partner at launch in the United States: The wireless radio is not compatible with Verizon's network and Mr. Thurber warned reporters not to expect to find the DTEK50 on AT&T's retail store shelves, either. In the United States, it will sell through retail channels like Amazon and Best Buy. In Canada, the big three wireless brands will carry it and there are 40 other distributors lined up worldwide.
The phone is available for preorder now, and will start shipping Aug. 8.
Editor's Note: An earlier version of this story said the DTEK50 has a 14-megapixel main camera. In fact, the camera has 13 megapixels.