The unnamed executive made the comments to CNET in an article published yesterday. AT&T is one of BlackBerry’s strongest partners so any admission of failure from the network doesn’t bode well for the ailing mobile company.
Initial expectations for the Priv suggested it would sell around 850,000 units in BlackBerry’s fiscal fourth quarter to the end of February. BlackBerry ended up shipping just 600,000 phones though, indicating demand is substantially less than anticipated.
The comments from AT&T imply the problem is even worse than first thought. “The BlackBerry Priv is really struggling,” the executive said to CNET. Ominously, the statement was followed by “We’ve seen more returns than we would like.”
The network representative offered a more precise explanation of why the Priv is failing. Its price is proving to be a major detractor, as acknowledged by the company earlier this year. The Priv launched at $699, more expensive than the $650 iPhone 6s. With few premium phones gaining substantial market share, the Priv was always going to be on shaky ground, especially when undercut by the iPhone.
In April, BlackBerry CEO John Chen admitted the Priv is “too high-end a product” to debut its Android line-up with. The company intends to launch two mid-range Android handsets in 2016, although so far neither device has made an official appearance. These will land around the $400 price point, a more attractive proposition to business buyers but still at risk of being overshadowed by established rivals.
When it launched, the Priv was met with a largely positive reception. Praise was directed at its strong security features aimed at enterprises, flagship performance and physical keyboard. Critics called out poor build quality, camera optics and battery life as key issues, alongside the $700 list price.
Chen has said he remains committed to the company’s smartphone business but previously confirmed he is prepared to leave it if a profit isn’t produced this year. In 2015, he told a conference that he will have to “rethink” BlackBerry’s role in the industry if it fails to recover its dwindling sales.
Chen has proven to be a leader accepting of BlackBerry’s current position. He remains optimistic for the future of the company’s mobile division while admitting it has to consider options beyond smartphones. Based on the comments of the AT&T exec, Chen’s recovery strategy may not be playing out as planned.
AT&T’s reference to a higher than expected returns rate indicates customers have had problems with their own handsets. For the network to be criticising its long-established partner indicates that patience for a revival is beginning to run out, hinting at the future of BlackBerry’s presence in the smartphone industry.
