BlackBerry Unveils Z30 Smartphone in Latest Comeback Effort

BlackBerry Ltd. (BB) will start selling its largest smartphone yet in the U.K. and Middle East next week, the latest step in a bid to turn around the struggling Canadian device maker.

The Z30, which has a 5-inch touch screen and is based on a newer version of the BlackBerry 10 operating system, was unveiled today at a Kuala Lumpur event, according to a statement. Prices will be announced by the phone’s carriers.

The company is counting on its new range of BlackBerry 10 phones to deliver a return to sales growth and profitability as it tries to regain market share from Apple Inc. (AAPL) and Samsung Electronics Co. (005930) Sales two quarters ago missed analyst estimates by almost 1 million units, and Waterloo, Ontario-based BlackBerry said last month it would consider putting itself up for sale or forging new partnerships.

BlackBerry, which traditionally made devices featuring a physical keyboard, in January unveiled the Z10 with a 4.2-inch touch screen that more closely resembled handsets like the iPhone. The Z30 has a 1.7-gigahertz processor, stereo speakers to improve conversation quality, and the largest battery ever built into a BlackBerry.

The stock fell 1.5 percent to $10.40 at the close in New York. The shares have dropped 12 percent this year and remain more than 90 percent below their 2008 high. BlackBerry will report fiscal second-quarter earnings on Sept. 27.

The worldwide mobile-phone market is forecast to grow 7.3 percent to pass 1 billion units for the first time this year, according to researcher IDC.

Apple, Google

BlackBerry, which already trailed Google Inc. (GOOG)’s Android and Apple’s iOS operating systems, also fell behind Microsoft Corp. (MSFT)’s Windows Phone in the first half of this year, IDC said. BlackBerry’s operating system will account for 2.7 percent of smartphones this year, declining to 1.7 percent by 2017, IDC said.

“BlackBerry OS share will decline markedly over the forecast due to tepid BlackBerry 10 reception and emboldened competition that are expected to whittle away share in its remaining regional bastions of strength, such as Africa, Latin America, and the Middle East,” IDC said this month.

Constrained by its shrinking market share, BlackBerry said in May it would begin offering its BBM instant-messaging software as a free application on its bigger rivals’ devices. The app will be available Sept. 21 for Android and the following day for iPhone, BlackBerry said today in a separate statement.

Upgrade Delay

Morgan Stanley (MS) is holding off on upgrading its employees to BlackBerry 10 because of concerns the company may not be around long-term to support the platform, two people with knowledge of the bank’s plans said last month.

BlackBerry may cut as much as 40 percent of its staff by the end of this year, the Wall Street Journal reported today. The job reductions will be across the company and will happen in stages, the newspaper said, citing people familiar with the matter.

BlackBerry had about 12,700 employees in March, the last time the company gave a payroll figure, after Chief Executive Officer Thorsten Heins cut 5,000 jobs in 2012 to save $1 billion in operating costs. Adam Emery, a spokesman for the company, declined to comment specifically on the 40 percent figure, which would be the equivalent of about 5,000 jobs.

“Organizational moves will continue to occur to ensure we have the right people in the right roles to drive new opportunities in mobile computing,” the company said in an e-mailed statement.

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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