The Canadian company BlackBerry Ltd. will cease to design or manufacture smartphones. Besides being known for its robust security solutions, BlackBerry was also a household name for its iconic QWERTY devices used by top government officials in the United States until recently.
The ex-manufacturer is pitching its decision as a Mobility Solutions strategy. BlackBerry will shift from making both hardware and software to focus only on the latter. Officials of the company said that the move answered to encouraging figures in the software sector rather than poor performance in smartphone sales.
BlackBerry’s announcement also covered a shakeup in its core leadership. The Chief Financial Officer James Yersh is reportedly leaving the company citing “personal reasons,” and CEO John Chen is bringing in Steven Capelli of Sybase as his replacement.
BlackBerry reported conflicting financial results for Q2
Regardless of how the company spins it, the figures are clear: BlackBerry did not meet the expected hardware sales results during the last fiscal quarter. External estimates placed revenue numbers at nearly $394 million, but the Canadian manufacturer only managed to gross $334 million after accounting for GAAP.
Meanwhile, net losses for the second quarter totaled a whopping $372 million, just over $0.70 per share. BlackBerry also reported increasing year-over-year growth in software sales at $156 million, but down $10 million about last quarter numbers.
While not completely disastrous, the company certainly could use a perspective change if they intend to stay in business in the future, several industry specialists have said.
Third parties will develop BlackBerry phones
BlackBerry as a company will stop making phones, but that does not mean that the iconic devices will cease to exist. Partner companies will design and manufacture devices under BlackBerry license agreements, a move that will make the company center primarily on software.
“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,” stated CEO John Chen for the press release.
Chen also claimed that its Mobile Solutions strategy was already in the works with a new development partner. BB Merah Putih, an Indonesia-based company, is the first partner that will officially develop mobile devices for the Canadian powerhouse.
This would not exactly be the first time BlackBerry has resorted to third parties in making smartphones since their latest DTEK50 was a revamped Alcatel design. None of the two companies have stated if they will continue to collaborate in the future under BlackBerry’s new strategy.