Sat, Dec 21, 2013 - Page 14 News List

Hon Hai agrees to make devices for BlackBerry

Bloomberg

BlackBerry Ltd, the struggling smartphone maker, struck a five-year deal with Apple Inc supplier Hon Hai Precision Industry Co Ltd (鴻海精密) to make its devices, following another quarterly plunge in sales and mounting losses.

Hon Hai, known in China as Foxconn Technology Group (富士康科技集團), will manufacture products for BlackBerry at plants in Indonesia and Mexico, according to a statement yesterday.

BlackBerry will own all of its intellectual property and handle quality assurance on devices through Foxconn, the world’s largest manufacturer of electronic products, the statement said.

BlackBerry chief executive officer John Chen (程守宗), hired last month after the company abandoned a plan to sell itself, is trying to restore confidence among both investors and corporate customers, who he says will be the focus of BlackBerry’s efforts in the future.

The Waterloo, Ontario-based company also said in the statement that its sales in the three months ending Nov. 30 fell 56 percent to US$1.19 billion. That missed the average estimate of US$1.59 billion in a Bloomberg survey of analysts. BlackBerry posted a loss from continuing operations of US$0.67. Analysts estimated a loss of US$0.46.

The Canadian company also said that it is taking a charge of US$4.6 billion for assets, inventory and supply commitments it is writing down.

FALLING SHARE

BlackBerry’s share of the global smartphone market tumbled to just 1.7 percent in the third quarter from 4.1 percent a year earlier, according to IDC. Android, the Google Inc operating system used by Samsung Electronics Co and others, had an 81 percent share, and Apple’s iOS had 13 percent, IDC said.

That’s left investors skeptical of Chen’s chances of turning BlackBerry around. The company’s stock has fallen 20 percent through Thursday’s close from Nov. 1, the last trading day before Chen took over. It rose 3.1 percent to US$6.25 on Thursday in New York and remains more than 95 percent below its 2008 high.

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