Blackberry to stop designing its own phones

By: | Published: September 28, 2016 8:36 PM

Canadian handset maker Blackberry has announced it will stop designing its smartphones in-house and instead focus on software and security products.

BlackberryCanadian handset maker Blackberry has announced it will stop designing its smartphones in-house and instead focus on software and security products. (Reuters)

Canadian handset maker Blackberry has announced it will stop designing its smartphones in-house and instead focus on software and security products. Once an iconic business phone, BlackBerry lost out to Google’s Android and Apple’s iOS-based smartphones. The move is expected to help the company reduce its capital burn. “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,” BlackBerry Executive Chairman and CEO John Chen said.

However, he did not comment on any future releases of BlackBerry handsets.

The Waterloo-headquartered firm said its software revenue has more than doubled year-on-year in the second quarter and delivered the highest gross margin in the company’s history.

It added that the company had around 3,000 enterprise customer wins in the quarter.

“We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold,” Chen said.

BlackBerry has also entered into a licencing agreement with telecom joint venture in Indonesia, BB Merah Putih, to manufacture, distribute and promote BlackBerry-branded devices running BlackBerry’s secure Android software and applications.

According to Gartner, BlackBerry had just 0.1 per cent of the market share in the second quarter, equating to sales of about 400,400 units.

The last BlackBerry phone to manufactured by the company was ‘Priv’, its first Android-powered device that was released last year globally.

For the quarter ended August, BlackBerry had posted sales of USD 334 million, down by 31.8 per cent from the year-ago period. The group swung to a net loss of USD 372 million from a profit of USD 51 million.

BlackBerry has also appointed Steven Capelli as its Chief Financial Officer with effect from October 1.

With 25 years of experience, Capelli has served across companies like Sybase, Siemens Pyramid, Digital Equipment Corporation, Unisys Corporation and WR Grace and Company.

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