BlackBerry Ltd plans to stop making its signature smartphones internally, signaling a strategic shift for a company that built its reputation on innovative smartphone technology.
Rather, all development for BlackBerry-branded phones is to be left to BlackBerry’s partners, which is to license BlackBerry’s technology and brand, while the Canadian company concentrates on growing its software business.
“We believe that this is the best way to drive profitability in the device business,” BlackBerry chairman and chief executive officer John Chen (程守宗) said in a statement on Wednesday.
He said the move would reduce BlackBerry’s expenses by eliminating the need to carry inventory and by reducing staff and equipment requirements.
BlackBerry was considered a game changer in 1999 when its RIM 950 allowed on-the-go business people to access e-mail wirelessly, but the company was late in overhauling its operating system to compete with rivals following the introduction of iPhone in 2007. BlackBerry now holds a small fraction of the US smartphone market.
During the company’s second quarter that ended Aug. 31, Chen said, the company sold about 400,000 smartphones. By contrast, Apple Inc sold 40 million iPhones in its most recent quarter.
BlackBerry said it had a US$372 million net loss in the three months ended Aug. 31, equivalent to US$0.71 per share, but broke even after excluding one-time items. Revenue was US$334 million, or US$352 million after adjustments. That was below the US$391 million estimated by analysts surveyed by Zacks.
The company plans to shift hardware development to partners by Feb. 28, when the company’s financial year ends. BlackBerry is to report its hardware revenue based on royalties it receives from licensing agreements.
BlackBerry has signed an agreement with a telecom joint venture in Indonesia. BB Merah Putih is to manufacture, distribute and promote BlackBerry-branded devices running the company’s secure versions of Android software and applications for the Indonesian market.
BlackBerry has the option to distribute these devices outside of Indonesia, but Chen said it is not likely to do so.
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