Blackberry has shifted away the money-losing handset business to focus on selling software and services.
ADVERTISEMENTBlackberry is hanging up the phone on internal hardware development and will start concentrating on selling software and services, effective immediately.
The Canadian group will licence its brand and hardware to third-party manufacturers. They will then develop phones bearing the Blackberry logo.
In its prime the company was a market leader valued at $80 billion, but it suffered in the face of fierce competition from the likes of Apple and Samsung.
Chief executive John Chen said the move helps it avoid the risks of a competitive market and focus on its more lucrative businesses of software and managing rival devices.
Blackberry bows out of making its own hardware
TechCrunch</a> <a href="https://t.co/DGRHox2NPx">https://t.co/DGRHox2NPx</a></p>— John Ashcroft (jkaonline) September 29, 2016
“What we did was cut off the entire chain, and I’ll take a royalty,” Chen told reporters. “I’m still in the handset business, but I’m in it in a profitable way.”
It has signed a deal with Indonesia’s BB Merah Putih to manufacture, distribute and promote new devices in that country, its largest handset market, and said it was in late-stage discussions for a similar deal in China and working on several India initiatives.
Chen said fewer than 100 jobs would be lost from the move away from making hardware.
“This is an entirely sensible decision and probably an overdue one,” said IDC technology analyst John Jackson. “Software revenue and the margin profile associated with that is where the focus should have been, and now can be.”
The company’s shares rose as investors welcomed a further shift away the money-losing handset business.
