UPDATE 3-BlackBerry to stop making Classic smartphone, stock weakens

(New throughout, adds more details, analyst comment, updates
share price)
By Alastair Sharp
TORONTO, July 5 (Reuters) - Smartphone pioneer BlackBerry
Ltd BB.TO 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 BBRY.O 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 AAPL.O
iPhone and others.
BlackBerry has since launched a phone powered by Alphabet
Inc's GOOGL.O 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 (NYSE:VZ) VZ.N and AT&T (NYSE:T)
T.N 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. On Nasdaq it was off 2.4 percent at $6.60.