Instant Analysis: BlackBerry Ltd Launches Its Second Android Phone

By Markets Fool.com

BlackBerry (NASDAQ: BBRY) recently announced the DTEK50, a $300 Android clone of TCL's AlcatelIdol 4S. The DTEK50 is much cheaper than BlackBerry's first Android device, the $700 Priv. However, it also sports weaker hardware -- theQualcomm Snapdragon 617 processor, 3GB of RAM, 16GB of storage, a 5.2" QHD display, and a 13MP rear camera are all standard features for many mid-range devices. And unlike the Priv, which has a slide-out physical keyboard, the DTEK50 is a touchscreen-only device.

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The DTEK50. Image Source: BlackBerry

BlackBerry claims that the DTEK50's memory chips are protected by cryptographic keys which make it the"world's most secure smartphone." It features BlackBerry's DTEK software, which shields the device from the malware and security issues which plague Android devices. The device also runs a modified version of Android integrated with security features originally developed for BB10.

But will anyone buy the DTEK50?

The Priv initially cost more than premium devices,including theiPhone 6S and Galaxy S7 -- a puzzling strategy considering that BlackBerry controlled just 0.2% of the global smartphone market. Moreover, many businesses' relaxed BYOD (bring your own device) policies allowed Apple and Samsung phones to be used as work devices. Even the U.S. Department of Defense and Senate have cleared the newest iPhones andGalaxy S devices (equipped with the Knox security platform) for unclassified government-level use.

The DTEK50 seems to address the Priv's pricing misstep, but it's unclear who the phone is actually made for. The device might gain some traction in emerging markets that want cheaper enterprise-grade phones, but it's unclear if the DTEK50's additional security features can differentiate it from the rest of the mid-range Android market. Alphabethas also been beefing up Android's security features with every release, which could dull the DTEK50's competitive edge.

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Still treading water . . .

I don't think BlackBerry has high expectations for the DTEK50. It's just another way for its hardware business to tread water until its software revenue, which hit $527 million last year and accounted for nearly a quarter of its top line, can take over as its main source of growth. Therefore, investors should see how the DTEK50 fares, but they shouldn't have high hopes for its long-term success.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fools board of directors. Leo Sun owns shares of Qualcomm. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.