UPDATE 4-BlackBerry ditches Classic, adding to smartphone future doubts

Tue Jul 5, 2016 2:45pm EDT
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(Adds analyst comment, details on Senate memo; updates share price)

By Alastair Sharp

TORONTO, July 5 (Reuters) - BlackBerry Ltd said on Tuesday it will stop making its Classic model, raising further doubts about the future of the smartphone pioneer's money-losing handset business as the company shifts its focus to software.

BlackBerry's stock fell more than 4 percent after an executive confirmed the move in a blog post. BlackBerry launched the Classic less than two years ago, hoping it would resonate with customers yearning for a physical keyboard in a world of touchscreens.

"Clearly the Classic was not sufficiently retro-cool to attract new users," said John Jackson, a technology analyst at International Data Corp. "This marks the end of an era that actually ended several years ago for all but a very small number of devotees."

The Classic, similar in design to its Bold predecessor, is powered by the overhauled BlackBerry 10 operating system, which failed to regain market share that was lost to Apple Inc's iPhone and others.

BlackBerry has since launched a phone powered by Alphabet Inc's dominant Android software and plans several more.

BlackBerry Chief Executive John Chen last month expressed confidence the company's trimmed-down handset business can turn a profit by a self-imposed September deadline, even as some analysts urge the company to ditch the unit.

The decision to end production of the Classic adds pressure on BlackBerry to exit handsets, said Morningstar analyst Brian Colello. Without a hit mid-range, BlackBerry likely will not be able to keep its handsets business going or sell it to another company, he said.   Continued...