It’s the end of an era. BlackBerry, the once-dominant maker of devices that kept business executives glued to their e-mail, will no longer develop its own phones.
The company said in notes alongside its second quarter financial results, published on Wednesday, that it will end all internal hardware development and will outsource that function to partners.
Details remain sketchy, but it appears that the company may retain the BlackBerry name on smartphones, but use partner companies to build the devices.
Google has followed a similar strategy with its Android-based Nexus and forthcoming Pixel devices.
BlackBerry has struggled for years to remain relevant in a smartphone market that has become dominated by Google’s Android and Apple’s iOS. But its other businesses, focused on software and services, are performing well.
“Our new mobility solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecommunications joint venture in Indonesia,” said CEO John Chen in the financial results announcement.
“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,” Chen said.
Recode reported that BlackBerry has been setting the stage for such a move for some time. It has already released a phone, the DTEK50, that is in essence a rebadged Alcatel device. It has also begun offering pieces of its phone software for use on other Android devices, the website said.
BlackBerry reported a second quarter net loss of US$372m on revenue of $334m. Excluding one-off items, it said it broke even, on adjusted revenue of $352m.
“We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold,” Chen said. “In the second quarter, we more than doubled our software revenue year over year and delivered the highest gross margin in the company’s history.” — (c) 2016 NewsCentral Media
