It’s official. BlackBerry is set to stop making smartphones.
The Company that claims to have invented the smartphone and addicted legions of road warriors to the “CrackBerry,” said overnight that they intend to get the loss making smartphone business “off their books”.
Conceding defeat in a battle lost long ago to Apple and Samsung Electronics, BlackBerry is handing over production of the phones to overseas partners and turning its full attention to the more profitable and growing software business.
It’s the formalization of a move in the making since Chief Executive Officer John Chen took over nearly three years ago and outsourced some manufacturing to Foxconn Technology the now owners of Sharp.
BlackBerry said it struck a licensing agreement with an Indonesian company to make and distribute branded devices.
More deals are in the works with Chinese and Indian manufacturers. It will still design smartphone applications and an extra-secure version of Alphabet Inc.’s Android operating system.
“I think the market has spoken and I’m just listening,” Chen said in a discussion with journalists. “You have to evolve to what your strength is and our strength is actually in the software and enterprise and security.”
The new strategy will improve margins and could actually increase the number of BlackBerry-branded phones sold, Chen said, as manufacturers license the name that still holds considerable sway in emerging markets like Indonesia, South Africa and Nigeria.
“This is the way for me to ensure the BlackBerry brand is still on a device,” Chen said.
Although BlackBerry’s latest phone, the DTEK50, was already almost completely outsourced, the move is a big symbolic step for a company that once reached a market value of $80 billion. Today, it’s worth about $4.3 billion.
