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A Blackberry Q10 smartphone is seen in front of a displayed stock graph in this photo illustration taken in Zenica, Bosnia and Herzegovina, in this May 22, 2015, file photoDADO RUVIC/Reuters

Just as BlackBerry Ltd. finally seems poised to answer the call consumers have been making – that it sell an Android-powered handset – worrying signals are emerging about the financial health of companies that rely on Google's mobile operating system.

Months of rumours, photo leaks and short glimpses by executives suggest BlackBerry's upcoming Venice smartphone will abandon its proprietary BB10 operating system in favour of Google's platform. Speculation is the Venice will be released this fall, and may boast a rather large 5.4-inch screen, an impressive 18-megapixel rear-camera and a slide-out version of BlackBerry's famed physical keyboard. Rumours suggest it is using the same 1.8-gigahertz Snapdragon processor as the LG flagship G4 phone.

By most measures, that's a premium device, and it is likely to be priced as such. Last year's Passport still sells for $600, and the throwback Classic is priced at $500.

"I always said, if I could secure Android, I would make an Android phone. Now if I can't, then I won't," BlackBerry chief executive officer John Chen said in June.

The larger question may be whether he can produce a secure Android phone cheap enough to fit into a changing market. This has been a very tough year for premium-priced Android phones.

"The global Android smartphone [average selling price] has been falling this year for struggling brands like HTC and Lenovo, but it has been increasing for rising brands that are expanding into higher price-bands, such as Huawei and Oppo," said Neil Mawston, executive director of London's Strategy Analytics.

Mr. Mawston says the news isn't all bad though; Android still captured an 84-per-cent share of smartphones sold in the quarter, and the high-end Galaxy S6 was the bestselling device even though it retails for more than $700 (unlocked) in Canada.

Samsung remains the biggest seller of Android devices in the world, but recent reports said the company is cutting 10 per cent of staff at its headquarters after five months of falling sales wiped $40-billion (U.S.) off its market value since April. Its lesser rivals have struggled even more: HTC's poor revenue has hammered its share price so badly that it is worth less than the cash it has on hand, and it was recently dropped from the Taiwan stock market's index of the country's top 50 largest companies.

"Cheap smartphones now have five-inch, HD displays, 4G and quad-core processors, so the gap in perceived value between devices like the OnePlus 2 and the Samsung Galaxy S6 is actually quite small," said Daniel Gleeson, a senior analyst with IHS Global in London.

Mr. Gleeson says some of the low-price competitors are honing their costs and features in the ultracompetitive Chinese market, but the likes of Huawei and ZTE make both smartphones and wireless networking equipment and have leveraged those relationships with Western carriers.

"Operators are looking to reduce their spend on smartphone subsidies, which is leading operators to replace LG and HTC with ZTE and Alcatel," he says. "These brands can also offer operators the opportunity to push 4G into lower price segments, which can help the operators boost their data revenue."

According to Mr. Mawston, half of the world's Android smartphones shipped in the second quarter were "entry-tier and mid-tier, below $200 trade price (not retail). This is the 'volume sweet spot' for Android smartphones worldwide today."

That would seem to be a mismatch for BlackBerry. Even though Mr. Chen has cut deals with contract manufacturers Wistron and Foxconn to help slash costs of BlackBerry handsets, they are still not "cheap."

BlackBerry's average selling price has improved in recent quarters, after hitting a low of $182 (Canadian) in the third quarter of 2015 (a 28-per-cent drop from the first quarter's $235). It rose back to $240 in the first quarter of fiscal 2016. That said, the company has only sold 1.1 million BlackBerry handsets so far in fiscal 2016, not quite on target for Mr. Chen's expectation of selling 10 million devices.

BlackBerry's $275 Leap phone, launched in April, is supposed to be the company's budget offering. Meanwhile, the ZTE Maven is selling for $60 (U.S.), unlocked, in the United States. Huawei, known for its ultracheap phones, saw its average selling price hit $131 in the second quarter of 2015, up from $117 in 2014.

"BlackBerry has a trusted name, but that alone is not enough to win them much market share by simply switching to Android," Mr. Gleeson said. "BlackBerry's best opportunity with Android would be to capitalize on Android's numerous security issues, which are a major problem for the enterprise market."

Android owners were rattled this summer after two major security holes were revealed by researchers. The Stagefright and Certifi-gate vulnerabilities exposed hundreds of millions of devices to potential hacks, and revealed one of Android's key weaknesses: update times. When a security fix is pushed to Android, manufacturers who have modified Android for their devices must then also update their version, and then wireless carrier partners must also approve the update for users on their networks.

"Because of Android's problematic update chain it can take weeks to months" for those updates to get to users, said Avi Bashan, technology lead of mobile threat detection at security vendor Check Point, which publicized the Certifi-gate vulnerability. "Moreover, there are phones which will never receive an update."

According to Mr. Bashan, owners of niche supersecure Android phones made by Blackphone were not exposed to those Certifi-gate flaws, which at least suggest it is possible to secure the operating system.

But there's another common source of new mobile malware: Google's Play Store itself. The millions of apps in Google's marketplace are a big reason why BlackBerry would risk its security reputation with an Android phone, but even though the Play Store is one of the safer places to download Android apps, it has still fallen victim to scams and spying software disguised as legitimate apps.

Asked for comment on its Android plans, BlackBerry sent the following statement: "We don't comment on rumours and speculation, but we remain committed to the BlackBerry 10 operating system, which provides security and productivity benefits that are unmatched."

Battle of the Androids

LG
The flagship G4 phone, released in April, has been blamed for Seoul-based LG's slowing sales in 2015
Specs: 5.5-inch 1,440 x 2,560 pixel screen, 16-megapixel camera, 3,000 milliampere hour battery, Qualcomm Snapdragon 808 Quad-core 1.44-gigahertz Cortex-A53, metal body
Price: As high as $700 without a contract
Carried by: All of Canada's major wireless companies, including Bell, Telus, Videotron, Rogers, Wind

HTC
The M9 is the Taiwanese company's 2015 premium device. Analysts say it hasn't sold well since its March release
Specs: 5-inch 1,080 x 1,920 pixel screen, 20-MP camera, 2840 milliampere hour battery, Qualcomm MSM8994 Snapdragon 810 Quad-core 1.5-GHz Cortex-A53, metal body
Price: $700 without a contract
Carried by: All of Canada's major wireless companies, including Bell, Telus, Videotron, Rogers, Wind


Motorola
Motorola, now owned by China's Lenovo, accounted for 5.9 million units shipped in the second quarter of 2015, 36 per cent of Lenovo smartphone sales. Motorola has a mix of models. Here's its best cheap phone, the Moto G:
Specs: 4.5-inch 720 x 1,280 pixel screen, 5-MP camera, 2,070 milliampere hour battery, Qualcomm Snapdragon 400 Quad-core 1.2-GHz Cortex-A7, plastic frame
Price: $150 without a contract
Carried by: All of Canada's major wireless companies, including Bell, Telus, Videotron, Rogers, Wind

Huawei
The Chinese company's Ascend Mate 2 is a 4G phone that is essentially a big-screen version of the Moto G with a better camera and battery.
Specs: 6.1-inch 720 x 1,280 pixel screen, 13-MP camera, 4,050 milliampere hour battery, Qualcomm Snapdragon 400 Quad-core 1.2-GHz Cortex-A7, plastic frame
Price: $300 without a contract
Carried by: Wind


Alcatel
The OneTouch Idol 3 sounds like it's made in Europe, but China's TCL Corp. bought the French tech company's mobile phone arm in 2007. The result is some cheap phones with premium specs.
Specs: 5.5-inch 1,920×1,080 pixel screen, 8-MP camera, 2,910 milliampere hour battery, Qualcomm Snapdragon 615 Quad-core 1.5-GHz Cortex-A53, plastic frame
Price: $250 without a contract
Carried by: Telus, Bell, Videotron (compatible with many other Canadian networks)


ZTE
China's ZTE has a confusing array of devices (the Grand X 2 for Bell, or very similar Grand X Plus for Fido) but they share one feature: great prices
Specs: 5-inch 720x1,280 pixel screen, 8-MP camera, 2,480 milliampere hour battery, Qualcomm Snapdragon 400 Quad-core 1.2-GHz Cortex-A7, plastic frame
Price: $150 without a contract
Carried by: Bell, Virgin and Fido (some devices are compatible with other networks)

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