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BlackBerry Ltd.: 3 Hurdles the Priv Must Overcome as it Goes on Sale

BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) is taking its last stand in the smartphone market as the Priv officially went on sale Friday.

As we all know by now, the Priv runs on Android, allowing users full access to the 1.6 million apps on Google Play. It also comes with a physical keyboard and some robust security features, both of which BlackBerry is well known for. The device seemingly offers the best of two different worlds.

Yet the Priv is facing some major hurdles as it goes on sale.

1. The price

To put it mildly, the Priv does not come cheap. Here in Canada the phone would set you back $899 without a contract. South of the border, the phone retails for US$699.

By comparison, you can get an iPhone 6s for only US$650. The Samsung Galaxy S6 costs as little as US$576. Other Android-based phones, from brands such as Motorola and LG, are cheaper still. In fact, among mainstream smartphones, only the iPhone 6s Plus and the Samsung Galaxy S6 edge+ sell at a premium to the Priv.

So far there’s been a negative reaction to the Priv’s high price point. A review in The Globe and Mail rightly pointed out that “most consumers don’t pull out the wallet for that kind of security.” Fortune magazine even called the price “absurd.”

2. The coverage

The Priv is a GSM-based phone, which means that in the United States, it will only be available through AT&T and T-Mobile. As for Verizon customers, they will likely have to wait until early 2016.

This is a serious problem for BlackBerry. Verizon is typically known as a premium carrier, one that customers pay extra for to get the best network. Thus, Verizon’s customers are also the ones most likely to want a Priv. Unfortunately, they won’t be able to get one before Christmas.

3. BlackBerry is inexperience with Android

As BlackBerry releases its first Android device, it is going up against companies that have been making Android devices for years. This puts BlackBerry at a serious disadvantage, one that should not be underestimated.

There are some early red flags as well. CEO John Chen had trouble with the device when giving a demo on The Business News Network. And a review on The Verge noted that there were some bugs with the Priv–apps were freezing and there were occasional issues with tap recognition. To top it all off, the Priv is running on a slightly dated version of Android, and an update is not expected until early next year.

So, we’ll have to see if the Priv overcomes these hurdles. BlackBerry’s entire smartphone-making division is depending on it.

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Fool contributor Benjamin Sinclair has no position in any stocks mentioned. Verizon is a recommendation of Stock Advisor Canada.

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