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The Canadian Press - ONLINE EDITION

BlackBerry announces new phones, services as part of comeback strategy

BARCELONA, Spain - BlackBerry Ltd. (TSX:BB) has unveiled a number of new products and services including a low-cost smartphone that will be released in April and an update to its flagship server software for organizations.

The Z3 smartphone, to be introduced first in Indonesia and then to other Asian markets, will sell for less than US$200 without subsidies, the company said Tuesday.

It will later expand to other markets in southeast Asia, one of the areas where the Canadian smartphone pioneer retains a significant share of a market that is now filled with rival devices.

In North America, particularly the United States, BlackBerry has been shoved aside in large part by Apple's iPhones and devices from manufacturers that use the Android operating system.

The Z3 is the first phone made under a new five-year partnership with Foxconn, the Taiwanese company that assembles products in vast factories in China.

Meanwhile, BlackBerry chief executive John Chen said the company will restore the keys in a new keyboard phone that he termed "Classic."

He said the new Q20 is a response to lacklustre sales of last year's Q10, which has a physical keyboard but lacks the track pad or keys for functions. He said the company got many complaints about that.

BlackBerry also announced plans to expand its services for businesses needing secure communications, particularly in regulated industries such as health care and financial services. There are plans, for instance, to go beyond securing just email and messaging.

Among the announcements at the Barcelona trade show, BlackBerry said Tuesday it will bring out a new version and new pricing structure for the BlackBerry Enterprise Server, which IT departments use to manage the email and other services for their mobile workforces.

The company says BES12 will combine features of previous versions of the system, to be available by the end of 2014.

BlackBerry also announced eBBM, a version of its BlackBerry Messenger service designed for its enterprise customers.

It's part of the company's plan to focus on its strengths in business services. BlackBerry strayed from that as it tried to lure consumers with new devices.

BlackBerry was the dominant smartphone for on-the-go business people and other consumers before Apple introduced the iPhone in 2007, showing that phones could handle much more than email and calls. BlackBerry was slow in modernizing its operating system, and once it did, the much-hyped system flopped.

Chen was brought in as CEO late last year after talks to sell the company collapsed.

Although he has been credited with turning around Sybase, a data company that was sold to SAP in 2010, Chen has acknowledged that reviving BlackBerry will be his most "complicated" challenge.

In the latest quarter, ending Nov. 30, BlackBerry reported a $4.4 billion loss and a 56 per cent drop in revenue. But the company said it had plenty of cash to engineer a turnaround, focused on areas where it had the greatest strength..

The new partnership with Foxconn will help reduce much of BlackBerry's manufacturing costs. Foxconn, known for its manufacturing contract work on Apple's iPhones and iPads, will jointly design and manufacture most BlackBerry devices and manage inventory of the devices.

Chen said BlackBerry will now target the heavily regulated industries that require greater security. It will simplify its pricing and let people upgrade to the latest systems for free this year. It will also offer free services this year for companies that had left BlackBerry for rivals.

BBM has been considered one of the reasons for BlackBerry's success in wooing customers to earlier versions of its smartphones.

The company announced Monday that it will make its BBM text messaging system available to two more types of smartphones, those running the Windows operating system and the Nokia X platform.

On the Toronto Stock Exchange, shares in Blackberry closed up 70 cents, or 6.88 per cent, at $10.87 on Monday after having gone as high as $11.18 earlier in the day.

_ With files from The Canadian Press.

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