Blackberry Quits Smartphone Production With Outsourcing Plan
After spending close to 15 years in the game, Blackberry has finally given up on smartphone hardware production. The Canadian tech giant has announced plans to stop designing and producing it own smartphones, to focus solely on software development which includes applications and security.
Announced along with the company’s Q2 Fiscal results call, Blackberry CEO, John Chen said;
“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.”
BlackBerry generated adjusted and GAAP revenue of US$352 million and US$334 million respectively for Q2 and missed analysts’ predictions of US$393.75 million. Revenue from software and services accounted for US$156 million on a non-GAAP basis and US$138 million on a GAAP basis.
Once considered as the most important smartphone maker in the world, Blackberry will continue releasing branded phones but manufacturing has been outsourced to partnering firms. In light of this, the company announced a joint venture agreement for the Indonesian market called BB Merah Putih.
Led by PT Tiphone Mobile Indonesia Tbk, an affiliate of PT Telekomunikasi Indonesia Tbk, PT BB Merah Putih will manufacture, distribute and promote BlackBerry-branded devices running BlackBerry’s secure Android software and applications.
Talks are said to be ongoing for a similar deal for the Chinese and Indian markets. Going forward we should be seeing more Blackberry branded phones based on reference designs such as the Blackberry DTEK50 (based on the Alcatel Idol 4) released and the upcoming DTEK60 (TCL 950).
For those of us expecting the BB10 OS 10.3.3 update, the release is in now in the final stage of NIAP certification.