By Alastair Sharp
TORONTO (Reuters) - Smartphone pioneer BlackBerry Ltd (TO:BB) will stop making its Classic model, the company said on Tuesday, some 18 months after launching the device it had hoped would entice users who prefer a physical, rather than touchscreen, keyboard.
Blackberry's move is the latest shift away from its money-losing handset business and toward its software. Shares in the Canadian technology company (O:BBRY) fell more than 3 percent after an executive confirmed the move in a company blog post.
"The news is another negative for this handset business," said Morningstar analyst Brian Colello. "It seems more and more likely that the company is going down the path of exiting handsets."
Colello said BlackBerry needs a hit mid-range, Android-based device. Without that, he said, the segment will likely be shut down. He said he would not expect it to be sold to another company.
The Classic was launched early last year, with a physical keyboard in the vein of its Bold predecessor and powered by the company's own overhauled BlackBerry 10 operating system, which has failed to regain market share ceded to Apple Inc's (O:AAPL) iPhone and others.
BlackBerry has since launched a phone powered by Alphabet Inc's (O:GOOGL) 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.
BlackBerry has turned from its once-dominant smartphones to the software that companies and governments need to manage their devices. Some analysts and investors have suggested BlackBerry jettison handsets entirely.
Separately, an internal U.S. Senate memo sent by IT staff and obtained by Reuters on Tuesday said BlackBerry had told major U.S. carriers Verizon Communications Inc (N:VZ) and AT&T (N:T) that all BlackBerry devices running BlackBerry 10 had been discontinued.
Asked specifically about the memo, a spokeswoman for BlackBerry said its device strategy is based on a cross-platform model and it will continue to support BlackBerry 10.
Verizon and AT&T did not immediately respond to requests for comment.
The company will no longer manufacture the Classic as it updates its device lineup "to keep innovating and advancing our portfolio," Ralph Pini, who joined BlackBerry in May as its new chief operating officer and devices head, said in a blog post. (http://blck.by/29iWGyz)
BlackBerry's stock has withered in recent quarters as its revenue fell. In Toronto, it was last down 3.8 percent at C$8.55 (£5). On Nasdaq it was off 2.4 percent at $6.60 (£5).