BlackBerry Quits Hardware Business; To Focus Only on Software From Now
BlackBerry has been having a rough time since the launch of the first iPhone and then Android devices back in 2010. The company became a laughing stock recently when it reported huge losses and poor pricing of its phones.
However, as had been expected, BlackBerry has bid farewell to its hardware business and it will not be manufacturing any smartphones from now on. Hardware was something BlackBerry was very proud of at one point of time, and then its software features rose to fame.
CEO John Chen commented on this move, “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.”
Preparations for the exit had reportedly started way back in January this year when the company decided to launch three new phones under the DTEK series, starting with DTEK50, focussing on the software part. The smartphone is actually a TCL hardware with Android and BB skin on top.
However, the future smartphones might come branded with the BlackBerry logo, but that is only because of licensing. The smartphone hardware will still be controlled by the company BlackBerry outsources to.
BlackBerry’s Defeat and Future Plans
Now that BlackBerry has accepted defeat, it is planning to switch completely to a software and security business. No doubt BlackBerry phones are said to be very secure, but the company is looking to invest more in this technology to reduce losses.
Surprisingly, BlackBerry had turned profitable last year, giving hopes to the company and the investors. However, they announced their dismal second quarter results with net losses of $372 million against profits of $51 million last year. iOS and Android have been the major companies biting into the share of this Canadian company.
Outlining its plans for the next year, BlackBerry said, “Our first licensing agreement is with a new joint venture called BB Merah Putih. Under the agreement, they will source, distribute and market BlackBerry handsets in Indonesia, our strongest market.”
Ironically, BlackBerry still thinks that they will have bright future ahead by focussing on just the software part of their devices. Although the company did see profits in software, it does not hold very well in a smartphone business, which sees ups and downs very frequently.
The good part is that BlackBerry has finally accepted defeat and moved on, instead of dragging the drama for more years. Finally it can focus on one aspect of the smartphones, instead of fooling around in the industry.
Source: Inside BlackBerry