Blackberry says it’s making an Android phone called Priv

BlackBerry has announced it would make a phone that runs Google's Android operating system, confirming a rumour that has been circulating for months. The announcement comes after the company released another poor earnings report on Friday, desperately looking for a successful product.

The move to Android should address the main limitation regarding BlackBerry smartphones — the lack of apps. The Android ecosystem has more than one million apps available by Google Play Store and thousands of homebrew unofficial apps available elsewhere online.

"This phone is the answer for former BlackBerry users who missed the physical keyboard but also need apps," Chen said.

The company could use a hit at this point in time. It reported a larger-than-expected loss of $66 million, excluding accounting adjustments, or 13 cents a share, for its second quarter. Analysts had been expecting a loss of 9 cents a share. The company's revenue was $490 million, compared with $916 million in the same period a year ago.

While Chen says he wants the company to make more money from selling software than from selling hardware, that point appears to be placed in the distant future. During the quarter, software and related services accounted for just 15% of BlackBerry's revenue while hardware contributed 41%. The remaining 43% came from monthly fees generated by older generations of BlackBerry phones for services on the company's proprietary network.

Chen acknowledged that prices were dropping rapidly for the software that companies and governments use to manage and secure employees' mobile phones — a key focus for BlackBerry. He said it was possible that such software might even become free.

Chen told analysts that the company would continue to make phones running its own operating system, BlackBerry 10, but he also made it clear that the focus of its phone business would be elsewhere. He said no new phones using BlackBerry 10 would be introduced this year.

For now, Chen said, the company's operating system would be kept around primarily to satisfy some customers in governments and regulated industries. But if the new Android phone is widely accepted, Chen said, even those customers may be moved over to it.