Blackberry stops making smartphones, but outsources it to partners

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Blackberry stops making smartphones

In its quarterly financial report, Blackberry has confirmed the recent rumours that were pointing towards an exit of the Canadian company out of the mobile hardware business. However, this is not the end for BlackBerry Android-powered smartphones, as customers interested in purchasing such branded devices will still be able to buy them. The OEM prefers to “outsource that function to partners” and we’ve seen it doing just so recently, when Blackberry announced DTEK 50 (a rebranded Alcatel Idol 4 at origins).

The announcement comes after revealing that its Mobility Solutions division registered an $8 million loss this last quarter. John Chen, Blackberry CEO, warned earlier in the year that if their hardware business wasnt getting back on its fit by September (2016), it would be the time to throw in the towel, which the company just did  this week.

“Our new Mobility Solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecom joint venture in Indonesia. Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital,” said John Chen.

Blackberry main focus is now on the software segment, where the company has “more than doubled its revenue year after year and delivered the highest gross margin in the company’s history. We also completed initial shipments of BlackBerry Radar, an end-to end asset tracking system, and signed a strategic licensing agreement to drive global growth in our BBM consumer business,” Chen also added.

Blackberry is learning from Google’s Nexus program by licensing other hardware companies to build devices for them, while their focus stays on software and security of such handsets.

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