Blackberry said on Wednesday it will no longer produce its own devices – Blackberrys, marking the end of another Blackberry era. If you haven’t been abreast about the affairs in Blackberry in the last couple of years, you would think the latest Blackberry news is a big thing. That Blackberry has decided to stop production of Blackberry smartphones is no big news.
Blackberry has been going through one divorce battle after the other. First, WhatsApp announced it will discontinue support for Blackberry followed by Facebook. Even the much talked about Blackberry Priv could not save the day due to poor market performance. Late in June, the United States Senate declared it will no longer issue BlackBerry smartphones within Senate and more recently, it declared it will no longer produce the Blackberry Classic.
The news to end production of Blackberrys is reportedly due to another loss and a sharp drop in revenue. The Waterloo-based company said it will stop building its own hardware devices and instead focus on making the software that goes into them.
“The company plans to end all internal hardware development and will outsource that function to partners,” BlackBerry said.
Handsets with the BlackBerry name will be produced under license by PT Tiphone Mobile Indonesia Tbk, allowing the Canadian firm to concentrate on software and services, a statement by the firms said.
Once a market leader, the company has struggled to keep pace with modern handsets produced by rivals such as Apple and Samsung. As the market shifted, BlackBerry has sought to refocus on software, including security applications, and the latest announcement takes the company out of the handset market entirely.
“Blackberry can’t keep producing its own phones indefinitely just to serve a small subset of its clients addicted to its home-grown devices,” said Ben Wood of the CCS Insight consultancy.
“Blackberry had made no secret of the fact that it might shut down its own phone-making business. Pushing it out to a third party is a sensible solution – but any manufacturer making Blackberry branded devices will ultimately face the same challenges.”
So now the focus is to be completely on Android phones. Blackberry CEO John Chen earlier confirmed plans to release two new Android-powered BlackBerry handsets for 2016 and rumors has it that, BlackBerry is currently working on three new Android phones, one already due for release.
In October last year, Blackberry admitted that 2016 is a crucial year for their smartphone business saying it may kill off their BlackBerry phones if they will not generate money. It hopes its latest Android operating smartphone launched in July 2016 would help restore the company to its former glory.
The shift to software has been part of Chen’s strategy since he took over the CEO role nearly three years ago. The move to software gives BlackBerry the chance to improve their margins and generate recurring revenue, says BGC Partners analyst Colin Gillis.
“The decision to outsource the last bit of smartphone manufacturing is just the final nail into their hardware business,” says Gillis. “It’s long been a business in decline, and their future is in software.”