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What Would an Android Phone Mean for BlackBerry Ltd.?

According to Reuters, BlackBerry Ltd. (TSX:BB)(Nasdaq:BBRY) is considering equipping a device with Google’s Android operating system. According to anonymous sources, BlackBerry would use Android on an upcoming “slider” device, which would feature a touchscreen and a sliding keyboard. BlackBerry teased such a device at this year’s Mobile World Congress tradeshow.

This would certainly be a major change of heart for BlackBerry. Until now, the company has shunned Android in favour of its BlackBerry 10 operating system. So what would this mean for BlackBerry, and how should shareholders react? Below we take a look.

A boost to the software business?

It’s no secret that BlackBerry is shifting its focus from handsets to software. CEO John Chen has made that clear plenty of times. Unfortunately for the company, its problems in the legacy handset business seem to be slowing down software sales.

For instance, BlackBerry is fighting the perception that its software solutions only work effectively with BlackBerry devices. There’s also a common belief that BlackBerry won’t survive in the long term, given its shrinking revenue. These perceptions are without doubt making some CIOs hesitant to buy BlackBerry software.

An Android-based device could help in these areas. It could show that BlackBerry’s software can secure devices on all major operating systems. It could also help stem the declines in its handset business.

An acknowledgement that things aren’t working?

There’s no denying that Mr. Chen is off to a great start in his turnaround plan. But there’s still a lot of disappointment on the top line. The company sold only 1.6 million handsets last quarter (which included the holiday season), so Mr. Chen’s goal of 10 million per year looks a long way off. Likewise, software sales have fallen short of expectations.

If you were hoping for a quick turnaround, this Android speculation sure isn’t a good sign. It may indicate that BlackBerry still isn’t making headway with its BlackBerry 10 operating system.

So would an Android phone help?

In an ideal scenario, an Android-based phone would stem the decline in hardware sales, and also give a boost to the software business.

In a worst-case scenario, an Android scenario would be seen as a desperation move, and further harm the BlackBerry brand. Remember, when Microsoft announced a plan to port iOS and Android apps onto Windows phones, the move was largely seen as a “white flag”.

How should a BlackBerry shareholder react?

These rumours, if true, are not a positive. Rather, they are a sign that the current suite of handsets and software solutions just isn’t catching on. And there’s a possibility that an Android phone would make things even worse.

So if you don’t have the patience to wait through some messy numbers, now’s a perfect time to sell any BlackBerry shares you own.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair has no position in any stocks mentioned. David Gardner owns shares of Google (A shares) and Google (C shares). Tom Gardner owns shares of Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares).

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