In a move professional business speakers around the world will likely be including alongside stories of Nokia and Kodak’s missteps and subsequent declines, BlackBerry has announced it won’t be making its own devices anymore, but will instead be outsourcing the job to partners.
Once the dominant handset manufacturer for business sorts and text-mad teenagers alike, BlackBerry’s hardware has been outpaced by mid-range Android-powered devices from manufacturers like Samsung, LG, HTC, Huawei and Xiaomi. Meanwhile, its failure to open its messaging service BBM to other platforms early enough to keep abreast of apps like WhatsApp have seen it go from the dominant messaging app to a negligible player.BlackBerry broke the news in a media release detailing its latest financials for the second quarter of fiscal 2017. “The company plans to end all internal hardware development and will outsource that function to partners,” says John Chen, BlackBerry CEO and executive chairman.
Instead, the company will focus on its software. BlackBerry’s dominance in its heyday had as much to do with its ultra-secure software as it did with its devices’ physical keyboards, making it an obligatory accessory at the time for politicians, lawyers and other security conscious sorts.
“Our new mobility solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecom joint venture in Indonesia,” says Chen. “Under this strategy, we are focusing on software development, including security and applications.”
Of course, BlackBerry hinted that hardware outsourcing was on the horizon in when it launched the DTEK50 in July, an Android smartphone manufactured by Alcatel. And who can blame it? The smartphone market is hyper competitive and the unique selling points — like physical keyboards and fixed-rate data packages — that made BlackBerry standout have been eroded as consumers have embraced touch displays and many operators have scrapped all-you-can-eat packages in the face of falling voice and messaging revenue.
“We are reaching an inflection point with our strategy,” Chen says. “Our financial foundation is strong, and our pivot to software is taking hold. In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company’s history. We also completed initial shipments of BlackBerry Radar, an end-to end asset tracking system, and signed a strategic licensing agreement to drive global growth in our BBM consumer business.”
So long, BlackBerry, and thanks for all the carpal tunnel syndrome.