For BlackBerry Key2, privacy is (again) a key pitch for comeback

For nearly a decade, BlackBerry smartphones have emerged from a potent brew of unrealistic ambitions and seemingly predetermined failure -- do you remember the BlackBerry Storm? Throughout the decline, BlackBerry has touted privacy , security and a physical keyboard as the marquee features of its smartphones.

Fast-forward to today, and what does the new BlackBerry Mobile talk about when promoting its BlackBerry Key2 smartphone? Privacy, security and a new physical keyboard.

It's easy to scoff at the prospects of BlackBerry (I mean, really easy). But things are a bit different.

BlackBerry Mobile, for one, isn't the old BlackBerry, but rather a unit of Chinese consumer electronics giant TCL, which also makes televisions and Alcatel-branded phones. As a result, it's free from the baggage of having went from the world's second-largest smartphone maker to a rounding error in analyst market share calculations. Gone is the old-school, locked down BlackBerry OS, with Android serving as its platform of choice.

And that discussion about privacy and security? The BlackBerry Key2 happens to be launching at a time when the issue is front and center, thanks to a myriad of data breaches, including Facebook's massive Cambridge Analytica scandal, in which the personal information of 87 million people was used without their permission to craft targeted political ads. You can't read the news without seeing another hack seemingly every week.

"It's a conversation that's been a hot topic," Alain Lejeune, president of BlackBerry Mobile, said in an interview. "It's a complex topic."

So the stage is set for a potential comeback, albeit a quiet one with smaller stakes. That itself is remarkable given a market dominated by Apple iPhones and Samsung Galaxy S smartphones -- and the fact that BlackBerry phones have seemingly doomed for the past several years. The ambitions aren't about revisiting past glories. BlackBerry Mobile executives over the past few months said that they were happy with the sales, which they wouldn't disclose. Neil Shah, an analyst at Counterpoint, said it sold 70,000 units in the first quarter, or about 0.02 percent market share. 

In comparison, Apple sold 52.2 million iPhones in the last period.

Francois Mahieu, the chief commercial officer of BlackBerry Mobile, said he hopes to capture 3 percent to 5 percent of the market for premium phones. Shah said that would equate to roughly 2 million to 3 million units per quarter.

A private space for you

BlackBerry Mobile hopes to draft off the privacy conversation to sell the Key2.

"For consumers, security means privacy," Lejeune said. "The starting point is the realization that your phone is a very public space."

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That is, it's public in the sense that handing over the phone gives people a deep window into your life. As a result, BlackBerry Mobile introduced new digital lockers that require your fingerprint. You can also lock down apps and even photos, which also require a fingerprint authentication to unlock.

The Key2 also comes with the FireFox Focus browser preloaded for anonymous browsing. (Chrome is in there too.)

"We need to have a private space," Lejeune said. "A space that's only for you."

There's also the DTEK app, which has been redesigned with a new user interface to better present what apps have what access to your phone.

"We're not going to control what you do with your device," said Patricia Querin, senior portfolio manager for BlackBerry Mobile. "We'll give you the transparency and awareness to do it by yourself."

In addition, BlackBerry Ltd. (yes, the original, now software-focused company) further secures the Android operating system. Lejeune noted that you can't root the Key2 or run a different version of Android than the one approved by BlackBerry Ltd. -- a feature added at the request of big corporate clients. This is a feature that's been around since BlackBerry made its own phones, starting with the Priv. 

"At BlackBerry, we truly believe that you own your data, and you need to be aware of how you're releasing it," said Alex Thurber, senior vice president of mobility solutions for BlackBerry Ltd, noting that the industry needs to do a better of educating consumers on the need for better security. 

This focus on security would be more effective had others not also jumped into the conversation.

"The timing is right for BlackBerry with all the privacy and security concerns boiling, with the Facebook debacle as a shining example," Shah said. "But at the same time, the likes of Apple are also turning its screws with iOS12."

Then there's the actual keys

The other aspect of BlackBerrys you think about is the keyboard.

It's here where BlackBerry Mobile made the most significant changes. The keys are each 20 percent larger than before, and the company added more texture to help with blind typing. The move from a glossy finish to a matte one helps with grip.

The keys have a capacitive sensor, one of the innovations introduced by the original BlackBerry in its otherwise maligned Passport smartphone. You could also set each letter key to serve as a shortcut to an app or action with a short or long press, giving you 52 options. For the Key2, the company introduced a "Speed Key" that lets you use that shortcut no matter what app you're in.

So far, you can't go as far as programming a set routine (mine would be a shortcut that automatically sets up and sends a text message to my wife that says, "I'm sorry") but you get close, like pulling up the text message prompt to a specific person.

Querin said that stacking actions is potentially something in the road map.

A unique offering

In a sea of smartphones with notches, the Key2 and its physical keyboard represents a deviation from the norm.

But it's that one distinguishing factor that leaves many skeptical about the phone. After all, more keyboard means less screen real estate, a big no-no if you're into Netflix or Fortnite on your phone. It shows the company is moving into niche territory -- and knows it. 

"They're trying to build this into a cult product," said Avi Greengart, an analyst at Global Data. "If you can get influencers to see this as a realistic option, maybe the IT managers will start to offer it again."

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Even Lejeune admits the Key2 isn't for everyone. "We are not necessarily looking at the mainstream," he said.

The new BlackBerry got the ball rolling with the original KeyOne , but Shah said it needs to build back the distribution to ensure more people can actually buy the device. That means more support from carriers like Verizon or AT&T (they aren't part of the announcement Thursday).

Greengart noted that BlackBerry didn't address the price issue, and at $650, made it $100 more expensive than last year's model. He added that TCL and BlackBerry Mobile didn't really address how they would market this product beyond showing a commercial that tapped into our nostalgic love for BlackBerry. 

But to the folks at BlackBerry Mobile, the legacy of the name still holds weight. 

"As much as it's difficult to articulate to the consumer, BlackBerry does equal safe," Lejeune said.

This story originally published on June 7 at 9 a.m. PT. 

Update, June 8 at 5:55 a.m. PT: To include further analyst comments. 

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