US Senate ditches BlackBerry phones: What's next for the tech company?

US Senate staffers will no longer be issued BlackBerry phones, according to a memo released earlier this week. 

Bobby Yip/Reuters/File
A Blackberry smartphone is displayed in this August 12, 2010 illustrative photo.

After more than 10 years of using physical keyboards, US Senate staffers will no longer be issued BlackBerry smartphones, according to a memo released earlier this week. 

The change is the result of Blackberry discontinuing production of devices running on BlackBerry OS 10, as reported in the email sent to staffers. (In a statement, BlackBerry clarified that the company will "continue to support our BlackBerry 10 platform while expanding our device offering to include Android-based devices," adding that software updates for Blackberry 10 are in the works.)

Once the remaining in-house supply of BlackBerry devices has been exhausted, staffers will have the option of using a Samsung S6, which runs on Android, or an iPhone SE, the Senate memo said. Support for BlackBerry devices will continue for the "foreseeable future." 

Despite the sinking popularity of BlackBerry smartphones in a world increasingly dominated by iPhone and Android devices, the Canadian company had managed to retain its government handset contracts, thanks to its reputation for having the most secure devices. 

But on its newest devices, BlackBerry is trading in its own operating system for Android. Last year, it released its first Android-powered phone, the Blackberry Priv, which one tech blogger described as "the phone that's supposed to save BlackBerry."

The phone wasn't as successful as its creators had hoped it would be, selling just 600,000 units in its first quarter of 2016. In an interview with The National, BlackBerry chief executive officer John Chen attributed low sales to the Priv's hefty price. 

Roberta Cozza, a research director at the industry analyst Gartner, told The National that Blackberry had "lost the consumer [handset] market a while ago."

"They really need to consider how profitable such a segment is," Ms. Cozza said. "They could feasibly carry on in what is now a very small market segment but they have to ask themselves, 'is this what the company should really still be focusing on?'"

While BlackBerry is reportedly planning to release three new Android phones in the coming year – two with full touch screens and one with the iconic QWERTY keyboard – the company has indeed begun to shift its focus from smartphones to software used by companies and governments to manage their mobile devices. 

Adjusted software and licensing revenue was $166 million in the fiscal first quarter of 2017, compared to $152 million for devices, breaking even overall. The company's annual software revenue was $527 million in its last fiscal year, and it's targeting 30 percent organic growth, Reuters reports. 

"Despite my best efforts to tell the world I'm a lot more than just a phone company, every question I ever get is about phones," Mr. Chen told reporters in June. 

He added that the company was also looking into licensing some of its handset technology. 

"I have so much credibility and knowledge in how to build a handset, but I don't have to build it," he said. 

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